Oregon-Washington R. & Nav. Co. v. Strauss & Co.

Decision Date19 November 1934
Docket NumberNo. 7498.,7498.
Citation73 F.2d 912
PartiesOREGON-WASHINGTON R. & NAV. CO. v. STRAUSS & CO., Inc.
CourtU.S. Court of Appeals — Ninth Circuit

Arthur C. Spencer and Roy F. Shields, both of Portland, Or., for appellant.

Wm. P. Ellis, of Salem, Or., and Walter B. Whitcomb, of Bellingham, Wash., for appellee.

Before WILBUR, SAWTELLE, and GARRECHT, Circuit Judges.

SAWTELLE, Circuit Judge.

The court below having sustained a demurrer to the appellant's complaint, the sole question presented on this appeal is whether or not the complaint states facts sufficient to constitute a cause of action.

The suit was instituted by the appellant to recover freight charges on shipments of grain originating at interior points in eastern Oregon and moving thence by the appellant's railroad to the appellee's dock at Portland, Or. The appellant contends that its complaint sufficiently alleges that the shipments in question were to be transshipped by vessel to other states and to foreign countries.

The freight charges sought to be collected were computed on the basis of the carrier's tariffs on file with the Interstate Commerce Commission. The controversy arose from the appellee shipper's contention that those tariffs were not applicable because the rail movement of the grain was intrastate and subject to local intrastate rates prescribed by the Oregon Public Service Commission.

On the other hand, the appellant carrier maintains that the rail transportation within the state was in reality a part of an intended movement to destinations beyond the state, and that therefore the essential character of the commerce was foreign or interstate, with jurisdiction of the rail rate vested in the Interstate Commerce Commission.

These conflicting positions present the issue to be determined here.

Briefly summarized, the complaint alleges that the appellee, through a subsidiary, owns a dock at Portland; that it is in the business of buying, selling, shipping, and exporting wheat; that "at all times" it "had a substantial number of outstanding and unfulfilled contracts" for sale and delivery of wheat to foreign and California destinations; and "that at the time of the movement by rail of each of the shipments mentioned in this complaint" it "had outstanding contracts for the sale of that wheat and all other wheat it then had on hand or which it was then in the course of purchasing." The complaint continues:

"In purchasing grain to meet such foreign sales contracts, the defendant appellee either purchased the grain while it was in the warehouses at interior points of origin or purchased it `f. o. b. track Portland' on the basis of Portland Terminal rates and grades; but in either event, when a particular shipment left the interior point of origin defendant did not always know then what particular vessel would carry the shipment in export or to what particular foreign sale it would be applied because the cargoes were made up by the mingling of grain from various localities as aforesaid and the shipment might form a part of several different ship cargoes, but the defendant did know, prior to the time the shipment left the interior point of origin, to what particular group of orders and group of cargoes such shipment would be applied. * * *

"All wheat brought to said dock by defendant for export went into export shipments even though such wheat, or some of it, did not average up to the type sample. * * *

"During said period defendant also sold grain to purchasers in California and shipped such grain by boat from Portland to California ports for delivery in pursuance to such sale contracts. * * *

"During all of said times defendant did, and at all times knew that it would, export to foreign countries and/or ship to interstate destinations upwards of 90 per cent of all grain purchased and handled by it, less than ten per cent being sold for domestic use in the State of Oregon.

"Each shipment mentioned in this complaint was purchased, sold, shipped and handled in the manner hereinbefore stated, and was actually exported to a foreign country or shipped by boat to a California destination. Each of said shipments remained at Portland only so long as reasonably necessary for the purposes of inspection, weighing, grading, cleaning, blending and assembling for ships' cargoes as aforesaid. All of said grain was at all times after it left the point of origin exempted from taxation by the State of Oregon and its subdivisions for the reason that it was considered to be in transit in interstate or export commerce after leaving such point of origin in Eastern Oregon. Because of the fact hereinbefore stated, the plaintiff alleges that the transportation of said grain by plaintiff over its line of railroad was part of a movement of same in interstate and foreign commerce and that the rates and charges applicable thereto are subject to the Interstate Commerce Act and the jurisdiction of the Interstate Commerce Commission."

Regarding the continuity of the transportation herein involved, the complaint contained the following allegations:

"* * * The transportation of said shipment between said points was a part of a through and continuous movement of said shipment from said point of origin through Portland, Oregon, to a point in another state or a foreign country as the ultimate destination thereof.

"That because of the facts hereinafter stated, the transportation of said shipment between said points was a part of a through and continuous movement of said shipment from said point of origin through Portland, Oregon, to a point in another state or a foreign country as the ultimate destination thereof."

The complaint contains 248 causes of action; each covering a different carload shipment. Only the first and second of these are set out in the transcript; the others being summarized in a single paragraph, in pursuance to a stipulation. The complaint prays for judgment in the sum of $10,099.01, representing the difference between the interstate rates claimed by the appellant and the intrastate rates actually paid by the appellee.

Holding that the complaint did not sufficiently allege either the intention of the parties that the shipments should move in interstate or foreign commerce or the fact that the transportation was continuous, the court below sustained the demurrer. The appellant electing to stand on its complaint, the court gave judgment for the appellee.

In its brief, the appellant explains that its decision to stand on its original pleading was based upon its unwillingness "to verify an amended pleading stating more than the known facts alleged in the original pleading."

As to the shipments that might have been destined for foreign countries, we may remark in passing that it is well established that the power of the Interstate Commerce Commission to prescribe or regulate rates for such commerce is authorized "only in so far as the transportation takes place within the United States." Lewis, etc., Co. v. Southern Pac. Co., 283 U. S. 654, 660, 51 S. Ct. 592, 595, 75 L. Ed. 1333; Texas & Pacific Ry. Co. v. U. S., 289 U. S. 627, 636, 53 S. Ct. 768, 77 L. Ed. 1410; Great Northern Ry. Co. v. Sullivan (C. C. A. 8) 72 F.(2d) 587, 588. Accordingly, in the instant case we are concerned, as we have seen, only with the rates that should have been charged on those portions of the shipments that took place within the state of Oregon. We are called upon to determine whether the complaint sufficiently alleges facts showing that such transportation, although between points within the state, was in reality a part of an interstate or foreign movement, to which the interstate rates would be applicable.

Under the decisions, it is clear that two elements are indispensable to constitute an interstate or foreign shipment:

(1) There must be a through and continuous movement from one state to another, or to a foreign country.

(2) There must be, at the time that the movement is started, an intention that the shipments shall be interstate or foreign, and this intention must be carried out. In a word, there must be the intent and the event.

As to the first ingredient the court below said: "Nor does the complaint set out continuity of transportation as a fact. It is true a sufficient allegation thereof appears in the first paragraph of Subdivision IV above quoted. But in the next paragraph, the same allegation is set out with the qualification `because of the facts hereinafter stated.' If the court consider the pleading as a whole, therefore, there is no direct and unqualified statement of a continuity of transportation as to the particular shipment."

In view of our holding upon the sufficiency of the complaint as to the allegation of the shipper's intent, it is unnecessary for us to pass upon the correctness of the...

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2 cases
  • State Board of Equalization v. Blind Bull Coal Co.
    • United States
    • Wyoming Supreme Court
    • 16 Abril 1940
    ...Company, 227 U.S. 111; Hughes Bros. Timber Co. v. Minnesota, 272 U.S. 469. The intent may characterize the shipment. Oregon-Washington Company v. Strauss, 73 F.2d 912. The power to divert is immaterial, if not availed of. Amer. Jur. 68; Hughes Bros. Timber Company, supra; Stafford v. Wallac......
  • Oregon-Washington RR & Nav. Co. v. FARMERS NAT. G. CORP.
    • United States
    • U.S. District Court — District of Oregon
    • 22 Noviembre 1937
    ...be for defendant. The complaint does not state a cause of action. In this respect it is ruled by the Oregon-Washington Railroad & Navigation Company v. Strauss & Co., 9 Cir., 73 F.2d 912. That was an identical case, based upon the complaint which this court held demurrable because there was......

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