Armour & Co. v. Alton R. Co.

• Citation: 111 F.2d 913
• Decision Date: 21 May 1940
• Docket Number: No. 7030.,7030.
• Parties: ARMOUR & CO. v. ALTON R. CO. et al.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

111 F.2d 913 (1940)

ARMOUR & CO. v. ALTON R. CO. et al.

No. 7030.

Circuit Court of Appeals, Seventh Circuit.

April 4, 1940.

As Modified on Denial of Rehearing. May 21, 1940.

Charles J. Faulkner, Jr., W. C. Kirk, and Paul E. Blanchard, all of Chicago, Ill., for appellant.

Meyer Morton, Elmer W. Freytag, Bryce L. Hamilton, Frank H. Towner, Kenneth F. Burgess, Douglas F. Smith, D. Robt. Thomas, Jr., and James F. Oates, Jr., all of Chicago, Ill. (Sidley, McPherson, Austin & Burgess, of Chicago, Ill., of counsel), for appellees.

Before SPARKS, TREANOR, and KERNER, Circuit Judges.

KERNER, Circuit Judge.

This is an appeal from a judgment of the District Court dismissing a complaint filed by Armour and Company, an Illinois corporation, engaged in the purchase and slaughter of livestock. 27 F.Supp. 625. Armour commenced this suit in the Circuit Court of Cook County against the Alton Railroad and various other railroad companies, hereafter also referred to as the "carriers." On July 14, 1938, the suit was removed to the Federal Court and therein filed on July 29, 1938. The defendant carriers moved to dismiss the complaint, the District Court entered a judgment of dismissal, and Armour appealed to this Court.¹

Armour and Company operates a packing plant adjacent to the public stockyards which are located at 39th Street and Racine Avenue, Chicago. These yards (constructed in 1865) are owned and operated by the Union Stock Yard and Transit Company of Chicago, hereafter referred to as the "Yards Company." Armour buys livestock in Illinois and other states, ships by rail to itself at Union Stock Yards, Illinois (the railroad station named in the tariffs), and pays the line-haul rate specified therein. Livestock consigned to this station is delivered by the defendant carriers at their common livestock depot, the yards of the Yards Company.

Prior to 1865 livestock shipped to Chicago packers was delivered by the various carriers at different places in the city. These places were not equipped with facilities for delivering livestock in any great quantity. After 1865, by the common action of the carriers and by arrangement with the Yards Company, the yards of this company became the usual place in Chicago at which livestock was delivered. Down through the years these yards continued to be the common livestock depot of all the carriers, and delivery was ordinarily made there. In expressing the same thought the Supreme Court described the yards as the "terminals of the line-haul carriers." Adams v. Mills, 286 U.S. 397, 409, 52 S.Ct. 589, 76 L.Ed. 1184. See also Interstate Commerce Commission v. C. B. and Q. R. R. Co., 186 U.S. 320, 22 S.Ct. 824, 46 L. Ed. 1182.

Thus it came to pass that these yards — providing such facilities as loading and unloading platforms, chutes and alleys, unloading and holding pens, and other livestock conveniences — became the common livestock depot of the defendant carriers. The Yards Company in supplying its yards, performs there the transportation services which the carriers are under a duty to render. Serving in this capacity it is the agent of the carriers and a common carrier subject to the Interstate Commerce Act. 24 Stat. 379, as amended in 1920, 41 Stat. 474, 49 U.S.C. Secs. 1-27, 49 U.S.C.A. §§ 1-27; United States v. Union Stock Yard & Transit Co., 226 U.S. 286, 33 S.Ct. 83, 57 L. Ed. 226; Union Stock Yard & Transit Co. v. United States, 308 U.S. 213, 60 S.Ct. 193, 84 L.Ed. ___. That it is proper for the carriers to discharge their duty to deliver at the place of destination, in this way, is clear. Merchants' Warehouse Co. v. United States, 283 U.S. 501, 506, 51 S.Ct. 505, 75 L.Ed. 1227.

At the yards employees of the Yards Company unload the livestock into unloading pens located upon the company's property. For this service the company charges the carriers a certain rate which is filed with the Interstate Commerce Commission. Since this service is a rail transportation service, rendered by the carriers (through their agent, the Yards Company) for the shipper, the charge therefor is covered by the line-haul rate. Adams v. Mills, 286 U.S. 397, 52 S.Ct. 589, 76 L.Ed. 1184. On the other hand, in addition to and separate from the rendition of rail transportation services, the Yards Company also performs specified stockyard services such as holding, feeding and storing. In rendering such a special service the company is subject to the Packers and Stockyards Act, and for such services charges the packer a certain rate which is filed with the Secretary of Agriculture. 42 Stat. 159, 7 U.S.C. Secs. 181 et seq., 201(b), 226, 7 U.S.C.A. §§ 181 et seq., 201(b), 226.

It might be said that in the rendition of a transportation service the Yards Company acts as agent of the carriers, but that in the performance of a stockyard service it acts as agent of the packer. Adams v. Mills, supra; Union Stock Yard & Transit Co. v. United States, supra; Burton v. Wabash Ry. Co., 332 Mo. 268; 58 S.W.2d 443, 447. It has also been said that "Stockyard services do not commence until unloading ends; they end when loading begins." Denver Stock Yards v. United States, 304 U.S. 470, 477, 58 S.Ct. 990, 82 L. Ed. 1469. See also Burton case, supra.

For many years the Yards Company has collected a specified "yardage" fee for all livestock received in the yards, and this charge has been filed with the Secretary of Agriculture. From the complaint and the exhibits attached thereto, it appears that the yardage fee is a per capita charge on all livestock received at the yards. But it does not appear what the exact nature of the service is, for which the charge is assessed. Plaintiff reasons that the charge is necessarily imposed on the privilege of removing the livestock from the unloading pens. Defendants leave the impression that the charge is levied for the rendition of a stockyard service.² In any event, until May 25, 1933, Armour paid this yardage charge without complaint.

In passing we add that the transportation of livestock by rail begins with its delivery to the carrier for loading at point of origin, and ends after unloading for delivery or tender to the consignee at the place of destination.³ This was the rule at the common law. Covington Stock Yards Co. v. Keith, 139 U.S. 128, 136, 11 S.Ct. 461, 35 L.Ed. 73. It is the rule under the Interstate Commerce Act. See Union Stock Yard & Transit Co. v. United States, supra. No magic is needed to compel the thought that the mere privilege of immediate removal from the unloading pens, "a mere way out to the public highways," is incidental to and part of the delivery. Atchison, Topeka & Santa Fe Railway Co. v. United States, 295 U.S. 193, 201, 55 S.Ct. 748, 79 L.Ed. 1382; See also dissent therein, 295 U.S. at page 203, 55 S.Ct. at page 753, 79 L.Ed. 1382.

On May 9, 1933, Armour notified the carriers and their agent, the Yards Company, that after May 25, it would accept delivery at the unloading pens and remove the unloaded livestock within a reasonable time thereafter, but would not pay the yardage fee. On May 10 the Yards Company answered that it would insist on the payment as long as the yards were used as the livestock terminal of the carriers. On May 16, Armour notified the carriers of this answer, but collection of the charge continued. However, after May 25, 1933, Armour paid the charge under protest and later instituted the instant case.

Nature of Consignee's Action. In the instant case Armour is not complaining that the line-haul rate is unreasonable, nor for that matter that the yardage charge is unreasonable. In the last analysis of things, it is plain that Armour's claim is based on the theory that the yardage charge is levied on a service, compensation for which is already included in the line-haul rate. We know that as consignee of livestock shipments, plaintiff is entitled to possession of the animals upon the payment of the lawful charges. Therefore, if indeed the carriers through their corporate agent have exacted an unlawful charge, then the exaction is a tort.

In general Armour alleges that the duty to deliver includes access to and from the unloading pens for the immediate removal of the cattle; this duty was breached. In particular Armour alleges that the yardage charge was imposed in addition to the scheduled tariff rate for the bare privilege of removal: such a charge is unlawful. See f.n. 2 also. In this light the suit here is one for damages occasioned by an alleged overcharge, the amount of which equals the yardage charges collected. See Adams v. Mills, supra; Atchison Ry. case, supra; United States v. I. C. C., 64 App.D.C. 43, 73 F.2d 948.

Armour contends that the complaint in question states a cause of action for damages occasioned by improper delivery. From this Armour reasons that the cause of action is not based upon any violation of the Interstate Commerce Act, and hence the Interstate Commerce Commission is without jurisdiction. We cannot agree with Armour's major premise. In the paragraphs above, regard was given to the substance of the transactions alleged in the complaint. For example, it is obvious that the instant case is not a mere "loss and damage" suit. It is not necessary to say more, except that the question at all times is one not of form but of actuality.

In substance the complaint states a claim based on over-charge, plainly a violation of the statute. Section 6(7) reads as follows: "* * * nor shall any carrier charge or * * * collect * * * a greater * * * compensation for such transportation of * * * property, or for any service in connection therewith, between the points named in such tariffs than the rates * * * specified therein * * *." Ordinarily the Courts and the Commission have concurrent jurisdiction over claims based on overcharge; therefore the difference of opinion between Armour and us as to the nature of the cause of action alleged, does not necessarily dispose of the case adverse to Armour's interest....