State Corporation Commission v. Bartlett & Co., Grain, 7938.

• Decision Date: 27 November 1964
• Docket Number: No. 7938.,7938.
• Citation: 338 F.2d 495
• Parties: STATE CORPORATION COMMISSION of Kansas, Richard C. Byrd, Chairman, Alvin F. Grauerholz and Harry G. Wiles, as Members of said Commission, and their respective successors in office, Appellants, v. BARTLETT AND COMPANY, GRAIN, a Missouri corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

338 F.2d 495 (1964)

STATE CORPORATION COMMISSION of Kansas, Richard C. Byrd, Chairman, Alvin F. Grauerholz and Harry G. Wiles, as Members of said Commission, and their respective successors in office, Appellants, v. BARTLETT AND COMPANY, GRAIN, a Missouri corporation, Appellee.

No. 7938.

United States Court of Appeals Tenth Circuit.

November 27, 1964.

Robert C. Londerholm, Prairie Village, Kan., for appellants.

Charles B. Blackmar, Kansas City, Mo. (Erle W. Francis, Topeka, Kan. and James H. McLarney, Kansas City, Mo., on the brief), for appellee.

Before BREITENSTEIN, HILL and SETH, Circuit Judges.

SETH, Circuit Judge.

Appellant, the State Corporation Commission of Kansas, is charged with the duty of administering the laws of Kansas relating to motor carriers. Kan.G.S. § 66-139 (1949). The Commission is here attempting to assert jurisdiction over the appellee by requiring it to comply with rates set by the Commission for truck shipments of grain within Kansas. This is an appeal from a judgment of the United States District Court for the District of Kansas which restrained and enjoined the appellant from exercising such jurisdiction.

The stipulation of the parties shows the facts to be as follows: The appellee, Bartlett and Company, Grain, is a Missouri corporation, licensed to do business in Kansas, engaged in warehousing and merchandising grain. It operates "country elevators" in Kansas near where grain is produced, and in addition operates an elevator known as River Rail Terminal Elevator at Kansas City, Kansas. This terminal elevator is equipped for receiving grain by rail and truck, and for shipping grain by truck, rail, and barge.

All of the grain involved in this action is unprocessed wheat, corn, rye, barley, grain sorghums, and soybeans. It is purchased by the appellee either at its country elevators or at other interior points in Kansas and transported by truck to River Rail also in Kansas. The trucks in which the grain is moved are neither owned nor operated by appellee, but are owned by various common, contract, and private carriers with whom appellee negotiates individually.

When the grain is delivered from the trucks at River Rail it is graded, tested, and deposited in a separate group of "truck" bins, used only for such purpose. This trucked grain is held exclusively for resale to customers located outside Kansas. Later, after it is deposited in the bins, the grain is mixed and blended in order to maintain and improve its quality and to provide accurately classified grain to meet the specifications of appellee's customers. During the harvest season truck shipments increase, but they take place during the entire year. The outbound shipments from River Rail proceed regularly throughout the year. While the appellee may have outstanding contracts for grain of certain grade and quality, no truckload or shipment is obtained to fill any particular outstanding contract.

The primary question to be decided in determining whether appellant may assert its jurisdiction over the rates charged by truckers carrying these shipments of grain to River Rail is, of course, whether the truck shipments are in intrastate or interstate commerce. It is well established that goods ultimately destined for shipment to another state acquire the character of interstate commerce as soon as they begin their journey, even though there is a temporary break in transit in the state of origin. However, this halt is an incident of the interstate movement. Texas & N. O. R. R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 S.Ct. 229, 57 L.Ed. 442; Chicago Board of Trade v. Olsen, 262 U.S. 1, 43 S.Ct. 470, 67 L.Ed. 839. The principle applicable in determining whether a shipment is one in interstate commerce was stated by this court in Wycoff Co. v. Public Service Comm'n of Utah, 195 F.2d 252 (10th Cir.): "If there is a continuing intent that the goods shall be transported until they reach a designated place, the entire transportation is a continuing one, notwithstanding that there may be a temporary stoppage enroute for a particular purpose." The court then cited United States v. Erie R.R., 280 U.S. 98, 50 S.Ct. 51, 74 L.Ed. 187.

In the case of Texas v. Anderson, Clayton & Co., 92 F.2d 104 (5th Cir.), the Court of Appeals for the Fifth Circuit was confronted with a case very similar on its facts to the present case. The plaintiff there was a dealer in raw cotton who entered into contracts to supply cotton to out of state buyers. In order to fill these orders, it would purchase cotton and have it shipped to Houston. There it was weighed, sampled, classed, and assigned with similar cotton to orders in hand for shipment to foreign countries or states other than Texas. If it had not already been done, the cotton was compressed to high density. It was then shipped by ocean carrier usually after a delay of seven to eight days after receipt in Houston. The court there held that when the cotton was purchased and shipped to Houston it was the intention of the plaintiff that it would be ultimately shipped to other states and foreign countries. The court further held that the intention existing at the time the movement starts governs and fixes the character of the shipment, and temporary storage within the state of origin made necessary in furtherance of interstate shipment does not change its character. In the cited case the court placed emphasis on the fact that the cotton was already sold to out of state buyers before it was shipped to Houston. However, this fact is not determinative in itself, but is important because it demonstrates a continuing intent that the cotton remain in interstate commerce. In the case at hand, the stipulation of the parties shows that the grain was not always purchased to fill existing contracts out of state before it was shipped to the River Rail Terminal Elevator; nonetheless, all of the grain purchased for the truck bins was in fact eventually shipped to out of state purchasers. The record does not reveal a single instance where this was not the case. This certainly demonstrates an original intent to move it in interstate commerce, and the deposit at the terminal elevator and the handling there did not change the character of the movement.

The United States Supreme Court, in Chicago Board of Trade v. Olsen, 262 U.S. 1, 43 S.Ct. 470, 67 L.Ed. 839, held that the mere fact that grain in interstate commerce underwent temporary storage, inspection, weighing, grading, or mixing, and changing of ownership or destination, before continuing on to its destination, although it did not prevent the local taxation of the grain, did not take it out of interstate commerce so as to deprive Congress of regulatory power over it. Thus in the case at hand from the time of purchase and shipment to River Rail until the time it was sent to out of state buyers, the activities in connection with the grain were performed in furtherance of a clear intent that it ultimately be delivered to a buyer outside of Kansas. The shipment to River...