219 U.S. 498 (1910), Southern Pacific Terminal Co. v. Interstate Commerce Commission

Citation:219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310
Party Name:Southern Pacific Terminal Co. v. Interstate Commerce Commission
Case Date:February 20, 1911
Court:United States Supreme Court

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219 U.S. 498 (1910)

31 S.Ct. 279, 55 L.Ed. 310

Southern Pacific Terminal Co.


Interstate Commerce Commission

United States Supreme Court

February 20, 1911




The case is not moot where interests of a public character are asserted by the Government under conditions that may be immediately repeated, merely because the particular order involved has expired. United States v. Trans-Missouri Freight Assn., 166 U.S. 290, 308.

The rule that this court will only determine actual controversies, and will dismiss if events have transpired pending appeal which render it impossible to grant the appellant effectual relief does not apply to an appeal involving an order of the Interstate Commerce Commission merely because that order has expired. Such orders are usually continuing and capable of repetition, and their consideration, and the determination of the right of the Government and the carriers to redress, should not be defeated on account of the shortness of their term.

The Interstate Commerce Commission has jurisdiction to regulate charges of a terminal company which is part of a railroad and steamship system and operates terminals such as those of the Southern Pacific Terminal at Galveston, Texas.

Verbal declarations cannot alter facts, and although the different parts of a system may be separate as regards their charters, each forms a link in the chain of transportation. One of the separate links in a system controlled by a holding company such as the Southern Pacific Company cannot escape regulation by the Commission because designated as a wharfage company; its property is necessarily employed in the transportation of interstate commerce.

All shippers must be treated alike, and, under the facts in this case, an arrangement, involving the lease of a wharf at a stipulated rental, between the shipper and a corporation whose wharves and terminal facilities thereon form links in a chain of interstate transportation, amounts to an unlawful or undue preference under the Interstate Commerce Act, the Commission having found the facilities amounted

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to an absolute advantage to the favored shipper, and that similar facilities could not be given to other shippers.

Where a means of interstate transportation is used to give one shipper an undue preference, the traffic comes under the jurisdiction of the Interstate Commerce Commission.

Goods actually destined for export are necessarily in interstate, as well as in foreign, commerce, when they actually start in the course of transportation to another State or are delivered to a carrier for transportation, Coe v. Errol, 116 U.S. 577; this is the same whether the goods are shipped on through bills of lading or on an initial bill only to the terminal within the same State where they are to be delivered to a carrier for the foreign destination.

This is a bill in equity to enjoin an order of the Interstate Commerce Commission requiring appellants to cease and desist, on or before the first day of September, 1908 (subsequently postponed to November 15, 1908), and for a period of not less than two years thereafter, from granting and giving undue preferences and advantages to one E. H. Young, a shipper of cotton seed products at the port of Galveston, Texas, through failure to exact from him payment of wharfage charges for handling cotton seed cake and meal over the wharves, docks and piers of appellants, while at the same time exacting such charges from other shippers of cotton seed cake and meal, and from giving and allowing him or any other person whomsoever, for his exclusive use, space on the wharves of appellants at Galveston for use in the storage and handling of cotton seed cake and meal, while contemporaneously refusing and denying similar privileges to other shippers under substantially similar circumstances and conditions. Young was not a formal party before the Interstate Commerce Commission. However, he was made a respondent in this suit, and filed an answer and cross-bill. The Commission demurred to both bill and cross bill, and, the demurrer being overruled, answered.

On final hearing the case was submitted upon an agreed statement of facts, and both bills were dismissed.

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The most important facts we set out below and in the opinion. We refer to the report of the Interstate Commerce Commission for further details.

The Republic of Texas conveyed to one Menard the property upon which the wharves of the terminal company are situated. Menard conveyed the property to the president and directors of the Galveston City Company, who conveyed it to Collis P. Huntington, for the sum of $200,000, and it is recited in the deed to him that it

is made upon the further Express Covenant and condition as follows: . . . when, through and by means of such acts of Congress, act of the legislature, and ordinance and conveyance from the city of Galveston, if any, as may be required for the purpose, . . . the right has been secured to the said Collis P. Huntington, or his heirs or assigns, to construct piers, as he or they may from time to time determine, . . . then and in that event the said Collis P. Huntington, his heirs or assigns, will, within six months thereof, commence the construction of terminal facilities upon the property . . . for the use of what are commonly called the Southern Pacific Railroad & Steamship Systems.

The city of Galveston, on the 4th of February, 1899, passed an ordinance which recited the conditions of Huntington's purchase to be as above stated, and that it was greatly to the interest of the city that the work contemplated by him should be performed, and that, for the proper utility of the property, no streets should be opened through or across it, and it was ordained that streets, avenues, or alleys, if any, theretofore opened, laid out, or in any manner designated upon the property be perpetually abandoned, discontinued, and closed. And Huntington, his heirs and assigns, were granted the right perpetually to construct and maintain piers as he or they might from time to time determine, "and to maintain upon the property terminal facilities for the use of what are commonly

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called the Southern Pacific Railroad & Steamship Systems, their successors or assigns." It was provided that, if Huntington should "charge wharfage for the use of such piers and other [31 S.Ct. 281] facilities upon said property, except so far as wharf service" might be covered by the freight rate, all such wharfage should be subject to the regulation of the railroad commission of Texas. And it was recited that it was greatly for the public interest that the property

should be developed for shipping and transportation purposes, and that the shipping facilities of the port of Galveston should be thereby improved and enlarged in order to better accommodate the commerce of the port and State. . . .

The ordinance was ratified by an act of the legislature approved May 1, 1899. The act set out the ordinance in full, and relinquished to Huntington the title and claim of the state to the property upon the conditions expressed in the ordinance, and, in addition to subjecting the wharfage charges to regulation by the railroad commission, required an annual report to that body. And it was provided "that the system of railroad tracks" which might be constructed by Huntington on the property should connect with the track of any railroad company which might be built to the property, at a place designated; and, further, that there should be no consolidation of the property, or the stock or franchise of any corporation which might own or control the same, with the Galveston Wharf Company, or any other wharf company, by which the "wharf or other terminal charges should be fixed," and that "no charter formed for the use, operation, and management of the property" should be granted without containing the section providing as above.

Huntington performed the conditions expressed in the conveyance and in the ordinance and the act of the legislature.

The Southern Pacific Terminal Company is a Texas

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corporation, organized in 1901, to construct and maintain wharves and docks for the accommodation of all kinds of vessels,

and to avail of, use, and enjoy the properties, rights, privileges, and franchises granted and described and referred to in the act of the legislature of the state of Texas of May 1, 1899, ratifying the ordinance of the city of Galveston, and to construct and maintain upon the property terminal facilities for the use of what are commonly called the Southern Pacific Railroad & Steamship Systems.

At the time of the incorporation of the terminal company, the following were commonly referred to as the Southern Pacific Railroad & Steamship Systems: the line of steamships owned by the Southern Pacific Company, running from New York to Galveston and New Orleans, and also running from and between the latter city and Havana; Morgan's Louisiana & Texas Railroad and Steamship Company; the Louisiana Western Railroad, which leads from New Orleans to the Sabine River; the Texas & New Orleans Railroad, leading from that river to the city of Houston; the Galveston, Harrisburg & San Antonio Railway; and the railroads in which the Southern Pacific Company owns stock, extending from the connection of the latter in El Paso, at the Rio Grande River, to San Francisco. Each of the railways was incorporated as a separate and distinct railway, and has its own officers and board of directors, but the Southern Pacific Company owns 99 percent of their stock, and the same percent of the stock of the terminal company. The two latter companies have the same president, and the Galveston, Harrisburg, & San Antonio Railway Company and the terminal company have the same general manager.

Import and export traffic passing...

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