Mitchell Coal Coke Company v. Pennsylvania Railroad Company

Citation230 U.S. 247,33 S.Ct. 916,57 L.Ed. 1472
Decision Date09 June 1913
Docket NumberNo. 674,674
PartiesMITCHELL COAL & COKE COMPANY, Plff. in Err., v. PENNSYLVANIA RAILROAD COMPANY
CourtU.S. Supreme Court

Mr. George S. Graham for plaintiff in error.

Messrs. John G. Johnson and Francis I. Gowen for defendant in error.

Mr. Justice Lamar delivered the opinion of the court:

On November 20, 1905, the Mitchell Coal & Coke Company brought suit in the circuit court of the United States for the eastern district of Pennsylvania against the Pennsylvania Railroad for damages alleged to have been occasioned by the payment of rebates to the Altoona, Glen White, Millwood, Latrobe, and Bolivar Companies. The complaint alleged that between April 1, 1897, and May 1, 1901, the plaintiff, in competition with these companies, made shipments of coal and coke over the Pennsylvania road from the Clearfield district to the same general markets in other states, and that, during all that time, the carrier paid rebates to these companies, pretending that the money given them was an allowance for transportation services rendered by them, in hauling cars over spur tracks between their mines and the railroad station.

The parties stipulated that the case should be submitted to a referee, who should have the powers of a special master. His findings were in favor of the plaintiff. His report, modified as to the measure of damages, was confirmed (181 Fed. 403), but before judgment was entered thereon the carrier moved to dismiss the case because the court, as a Federal court had no jurisdiction of the cause of action until after the Interstate Commerce Commission had passed upon the legality of the allowances and the reasonableness of the amount paid to shippers for hauling cars between their mines and the station. The motion was granted (183 Fed. 908), and the case was taken by writ of error to the circuit court of appeals, which dismissed the case (112 C. C. A. 637, 192 Fed. 475) upon the ground that the question could only be reviewed by the Supreme Court of the United States. A writ of certiorari was denied (223 U. S. 733, 56 L. ed. 635, 32 Sup. Ct. Rep. 528), and the plaintiff thereupon brought the case here by direct writ of error, the judge certifying the following as the jurisdictional question:

'Has the circuit court of the United States, in advance of any application to the Interstate Commerce Commission and action thereon by that body, jurisdiction to entertain an action of trespass brought by a shipper of coal and coke, to recover damages because of the alleged unlawful preferential rates accorded to other and competing shippers of coal and coke, when such alleged preferential rates are claimed to have resulted from payments made to such other shippers, which payments the plaintiff claimed were rebates from the published and filed freight rate, and the defendant claimed were made as compensation for services rendered by such shippers or for other accounts which justified it in making the same, and when it further appeared that such payments had been made pursuant to a practice of long standing, and that a number of shippers other than the plaintiff were interested in the question of the lawfulness thereof.'

1. The plaintiff's cause of action for damages occasioned by the payment of illegal or unreasonable allowances was one which, under §§ 8 and 9 of the commerce act (24 Stat. at L. 382, chap. 104, U. S. Comp. Stat. 1901, p. 3159), could only be brought in a district or circuit court of the United States. The motion to dismiss challenged the jurisdiction of the court, as a Federal court, and its power 'primarily to hear complaints concerning wrongs of the character of the one here complained of.' Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 442, 51 L. ed. 559, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Baltimore & O. R. R. Co. v. United States ex rel. Pitcairn Coal Co. 215 U. S. 495, 54 L. ed. 297, 30 Sup. Ct. Rep. 164; Robinson v. Baltimore & O. R. Co. 222 U. S. 506, 56 L. ed. 288, 32 Sup. Ct. Rep. 114. The order of dismissal was founded on the denial of jurisdiction, and this court has power to review that ruling. The Ira M. Hedges (Lehigh Valley R. Co. v. Cornell S. B. Co.) 218 U. S. 270, 54 L. ed. 1039, 31 Sup. Ct. Rep. 17, 2 Ann. Cas. 1235; The Jefferson, 215 U. S. 130, 54 L. ed. 125, 30 Sup. Ct. Rep. 54, 17 Ann. Cas. 907. The case differs from R. J. Darnell v. Illinois C. R. Co. 225 U. S. 243, 56 L. ed. 1072, 32 Sup. Ct. Rep. 760. There the Commission had found that the rate was unreasonable. The demurrer, based on the failure to allege that a reparation order had been made in favor of the plaintiff, did not attack the jurisdiction of the court, as a Federal court, since the cause of action sought to be enforced was one which, if properly brought, could, under the act of 1910 (36 Stat. at. L. 554, chap. 309),1 have been maintained either in a state or Federal court.

2. In the present case the motion to dismiss for want of jurisdiction was made at the end of the trial, and was based not upon the pleadings, but upon the evidence. It becomes necessary, therefore, to make a statement of the facts material to that issue:—The plaintiff, the Mitchell Coal & Mine Coke Company, owned six coal mines in the Clearfield district, and between 1897 and May 1, 1901, shipped its products over the Pennsylvania Railroad in state and interstate commerce. During that time the provisions of the commerce act were constantly violated, and there were many instances in which the carrier gave secret rates to shippers from whom it collected the full tariff and subsequently refunded the difference between the legal and the illegal rate. Many such rebates were paid to the plaintiff, the Mitchell Company, which in this case claimed the right to recover, as damages, the difference between these rebates paid to it and what it claimed were the additional rebates paid to the Altoona and other companies mentioned in the declaration. The referee found that, for a part of the time, 70 per cent of plaintiff's ——, 97 C. C. A. 383, 173 Fed. 1, 9, rates, and held, citing Pennsylvania R. Co. v. International Coal Min. Co. ——L.R.A.(N.S.) ——, 97 C. C. A. 383, 173 Fed. 1, 9, that, as to this tonnage, the plaintiff was as much a violator of the statute as was the carrier, and that no cause of action arising out of this illegal contract would be enforced by the courts. He therefore limited the inquiry to a consideration of the damages in respect to that part of the plaintiff's shipments on which no rebates had been paid.

From the referee's report, and the testimony returned therewith, it appears that Clearfield district is the name given to a large coal field reached by the lines of the Pennsylvania Railroad. In this district there were many mines—some near the railroad and others at considerable distances therefrom, but all reached by lateral lines or spur tracks, over which cars were carried to and from the mines. This Clearfield district was treated as a single shipping station, and the rates from all points therein were the same where the coal was transported to the same point beyond the state. The published tariff named the rate from station to destination, but it was uniformly construed to include the haul from the mine. The published rate was so applied on all shipments made by the plaintiff as well as on those made by the Altoona and other companies named in the complaint.

It further appeared that to these companies the carrier paid what is called a trackage or lateral allowance, claiming that it was compensation allowed them for hauling cars from their mines to the station. The defendant's contention that there was no concealment of these payments is controverted by the plaintiff, which insists that it had no knowledge of such payments until 1898, when its officers were informed that the railway was paying some companies 10 cents a ton for such services. The Mitchell Company, the plaintiff, thereupon bought an engine to be used for that purpose at its Gallitzin mine, and with this engine hauled cars, loaded and empty, between that mine and the station. For this work it demanded that the defendant should pay the same lateral allowance of 10 cents a ton that the railroad paid other companies for similar services. The carrier contended that it was itself prepared to do the switching at the Gallitzin mine, though, on account of dissimilarity of conditions, it could not economically do so at the Altoona and other mines referred to in the complaint. It therefore declined to pay a lateral allowance to the plaintiff, but offered to continue to treat this haul as included in the rate, and to do that work without extra charge to the Mitchell Company. The plaintiff then offered to do the hauling for less than 10 cents, the exact amount not appearing. The proposition having been declined in 1899, the plaintiff, on November 20, 1905, brought this suit, offering evidence to show that in some cases the allowance was as high as 18 cents a ton instead of 10 cents, as it had previously understood.

In addition to the Gallitzin mine, the plaintiff owned five others in the Clearfield district. They were located at points from 1,100 to 3,000 feet from the railroad, and were reached by spur tracks belonging to the plaintiff, over which cars were hauled by the locomotives belonging to the Pennsylvania Railroad. For this service the carrier made no extra charge, treating it as included in the rate, though the tariff published the rate as from station to destination.

The mines of the Altoona, Glen White, and Millwood Companies were located in the Clearfield district, while those of the Latrobe and Bolivar Companies were near by in the Latrobe district.

The Millwood was reached by a narrow gauge track, over which cars were hauled by that coal company's narrow gauge engines. For doing that work it was paid a lateral allowance of 15 cents a ton until April, 1899, and after that date 10 cents a...

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