F.H. Peavey & Co. v. Union Pac. R. Co.

• Citation: 176 F. 409
• Decision Date: 03 March 1910
• Docket Number: 3,405,3,437.
• Parties: F. H. PEAVEY & CO. et al. v. UNION PAC. R. CO. et al. DIFFENBAUGH et al. v. INTERSTATE COMMERCE COMMISSION (CHICAGO & A.R. CO. et al., Interveners).
• Court: United States District Courts. 8th Circuit. Western District of Missouri

176 F. 409

F. H. PEAVEY & CO. et al. v. UNION PAC. R. CO. et al.

DIFFENBAUGH et al. v. INTERSTATE COMMERCE COMMISSION (CHICAGO & A.R. CO. et al., Interveners).

Nos. 3,405, 3,437.

United States Circuit Court, W.D. Missouri, Western Division.

March 3, 1910

Syllabus by the Court

Parties injuriously affected by the orders of the Interstate Commerce Commission may lawfully institute suits in the Circuit Courts to enjoin, suspend, or annul such orders, although they were not parties to the proceeding before the commission on which the orders are based.

Frank Hagerman (M. B. Koon, George T. Bell, and John Barton Payne on the brief), for complainants.

Arba S Van Valkenburgh and P. J. Farrell, for Interstate Commerce Commission.

F. C Dillard and Edson Rich (N. H. Loomis and R. W. Blair, on the brief), for Union Pac. R. Co.

Frank Hagerman and John Barton Payne, for interveners.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

SANBORN Circuit Judge.

Has the Interstate Commerce Commission the power to prohibit railroad companies from paying to the owners and lessees of elevators all compensation for the elevation of grain in transit?

Until June 29, 1908, repeated decisions of the commission and the practice of carriers and shippers had been consonant with a negative answer to this question. In the Matter of Allowances to Elevators by the Union Pacific R.R. Co. (June 25, 1904) 10 Interst.Com.R. 309, 324, 325, 326; In re Hearing on Petition of Chicago Great Western Ry. Co. et al. (April 9, 1907) 12 Interst.Com.R. 85, 89; City Council of Atchison v. Missouri Pacific Railway Co. (April 29, 1907) 12 Interst.Com.R. 112, 114; Consolidated Forwarding Company v. Southern Pacific Company (April 19, 1902) 9 Interst.Com.R. 182, 206e; American National Live Stock Ass'n & Cattle Raising Ass'n of Texas v. Texas Pacific Ry. Co. (March 7, 1907) 12 Interst.Com.R. 32, 36; Central Yellow Pine Ass'n v. Vicksburg, Shreveport & Pacific Ry. Co. (March 19, 1904) 10 Interst.Com.R. 193, 211, 213; In the Matter of Unlawful Rates and Practices in the Transportation of Cotton by the Kansas City, Memphis & Birmingham R.R. Co., 8 Interst.Com.R. 121, 136, 139, 140; Merchants' Cotton Press & Storage Co. v. Interstate Commerce Commission (June 24, 1909) 17 Interst.Com.C.R. 78, 99, 101, 103, 105; Kentucky Railroad Commission v. L. & N.R.R. Co., 10 Interst.Com.R. 173.

On June 29, 1908, the commission gave an affirmative answer to the question before us, and issued orders which in terms forbade the Chicago, Burlington & Quincy Railroad Company, the Missouri Pacific Railway Company, the St. Louis & San Francisco Railroad Company, the Chicago, Rock Island & Pacific Railroad Company, and the Missouri, Kansas & Texas Railroad Company, and in effect forbade the Union Pacific Railroad Company, to pay or allow to the owners or lessees of elevators at Omaha, Kansas City, and other cities on the Missouri river, any compensation whatever for the elevation of grain in transit at those points, and on October 16, 1908, announced that the principle of the decision upon which these orders are based applies everywhere, and that the commission expects that it will be universally accepted by carriers throughout the nation. In the Matter of Allowances to Elevators by the Union Pacific R.R. Co., 14 Interst.Com.C.R. 315; Traffic Bureau Merchants' Exchange of St. Louis v. Chicago, Burlington & Quincy R.R. Co., 14 Interst.Com.R. 317, 331, 510.

Mindful of the fact that this ruling and these orders were subversive of former decisions and of an approved course of business thereunder in reliance upon which hundreds of thousands of dollars had been invested in elevators and facilities for the transfer of grain, that great grain markets had been established near the producers upon the Missouri river at the termini of railroad systems, and that the parties in interest desired a review of the legal issue presented, the commission postponed the effective date of the orders until the suits in hand could be brought to final hearing.

It may not be unprofitable, before entering upon the discussion of the question at issue, to call to mind a few general propositions of law, the general situation of the parties, the business, and the transportation out of which this issue arises.

Every railroad company has the right to insist that its cars shall be unloaded at the termini of its railroad and that their contents destined to points beyond shall be loaded into cars or other vehicles of the connecting carriers. Elevation and weighing in the elevator are indispensable means of the transfer of grain from the cars of one carrier to those of another under the existing conditions and methods of transportation through our large cities. There is neither time nor space nor labor for the shovel or any other method of transfer, or for weighing in the car or any other method of weighing. The operators of elevators weigh and certify to the weight of grain as it passes through their elevators, or it is weighed in the elevators, and its weight is certified by some official of the state or of some grain exchange or other association, and these certificates are accepted as conclusive evidence by carriers, shippers, and dealers alike. Elevation consists of the unloading of grain from cars or vessels into elevators and the loading of the grain out again into cars or into other vehicles. As elevation is indispensable to weighing in the elevator, if the prohibition of compensation for elevation in transit shall prevent the elevation of the grain at the Missouri river, it will also prevent the weighing there, so that the inhibition at issue in these cases really involves transportation services both in elevation and in weighing in transit.

'All services in connection with the * * * elevation * * * of the property transported' are transportation. Act June 29, 1906, c. 3591, Secs. 1, 2, 4, 34 Stat. 584, 586, 589 (U.S. Comp. St. Supp. 1909, pp. 1150, 1153, 1158), to amend Interstate Commerce Act Feb. 4, 1887, c. 104, Secs. 1, 6, 15, 24 Stat. 379, 380, 384 (U.S. Comp. St. 1901, pp. 3154, 3156, 3165). Railroad companies are required to furnish these services upon request (section 1); to state separately in their schedules their charges therefor (section 6 as amended), and if such services are rendered by the owner of the property transported the charge and allowance therefore may not be more than is just and reasonable (section 15 as amended). The allowance for the elevation of grain here in question was three-fourths of a cent per hundred pounds. It was separately stated in the schedules of the carriers, and was allowed only upon grain received into the elevators from cars coming from the west which was shipped out of the elevators into cars bound east, north, and south. The same services in elevation were offered to all shippers, and the same allowance was made to all operators of elevators, whether they were or were not the owners of the grain transported.

More than 90 per cent., nearly all, of the grain brought to the Missouri river passes on to destinations east, north, and south. This grain takes the local rate from points west of the Missouri river to the river and from the Missouri river to the Mississippi river, and to points beyond it takes the proportional rate, which is less than the local rate upon a certificate that it has come from points west of the Missouri river.

In 1907, 209,728,650 bushels of grain were handled in and out of Omaha, Kansas City, Atchison, and St. Joseph. Since January 1, 1904, more than $3,000,000 have been invested in elevators in those cities for the purpose of handling this grain.

The Union Pacific Railroad Company has railroads extending into and through the grain fields of Kansas and Nebraska, and its eastern termini are at Kansas City and Council Bluffs, which for the purpose of this opinion is included in the general term 'Omaha.' The greater volume of the grain moves from the fields in Kansas and Nebraska each year to the Missouri river in a few months in the autumn and winter. The portion of that grain which a railroad company can haul depends upon the number of box cars it can use for this purpose during this small portion of the year. The Union Pacific Company has the short haul. It is in competition with companies that have railroads from these grain fields through Missouri river points to and beyond the Mississippi river. They can carry this grain profitably on their own cars and rails east as well as west of the Missouri river without elevation; but it is requisite to the profitable use by the Union Pacific Company of its equipment that the grain be elevated out of its cars at the Missouri river, and that the cars be sent back west for new loads promptly. If it permits these cars to pass on east over connecting lines, they will be absent when their use upon its railroads is most needed and is most profitable; it will lose a large share of the traffic in this grain and of the revenue which it could earn by the use of its cars upon its own tracks. Thus the elevation of the grain at Omaha and Kansas City is necessary to the reasonable competition and participation of the Union Pacific Company in this transportation.

The Chicago Great Western Railroad Company, and other companies, whose western termini are at Missouri river points, are in a like situation. The elevation of the grain at those cities is equally indispensable to their participation in this traffic. They can get no grain into their cars at Omaha and Kansas City unless it is first taken out of the cars which bring it from the west to the river.

On the other hand, carriers that have railroads from the grain fields of Nebraska and Kansas through the Missouri river cities to the north, east, and south...