American Sugar Refining Co. v. Delaware, L. & W R. Co.

• Decision Date: 19 August 1913
• Docket Number: 1,737,1,738.
• Citation: 207 F. 733
• Parties: AMERICAN SUGAR REFINING CO. v. DELAWARE, L. & W.R. CO. SAME v. NEW YORK CENTRAL & H.R.R. CO.
• Court: U.S. Court of Appeals — Third Circuit

207 F. 733

AMERICAN SUGAR REFINING CO. v. DELAWARE, L. & W.R. CO.

SAME v. NEW YORK CENTRAL & H.R.R. CO.

Nos. 1,737, 1,738.

United States Court of Appeals, Third Circuit.

August 19, 1913

Chauncey G. Parker, of Newark, N.J., William A. Glasgow, Jr., of Philadelphia, Pa., and James M. Beck, of New York City, for plaintiff in error.

John L Seager, Douglass Swift, and Vredenburgh, Wall & Carey, all of New York City (Albert C. Wall, of New York City, of counsel) for defendants in error.

Before GRAY, BUFFINGTON, and McPHERSON, Circuit Judges.

GRAY Circuit Judge.

These cases are presented upon writs of error to the United States District Court for the District of New Jersey, to review judgments entered in that court, in February, 1913, in favor of the defendants in error, defendants below. They were tried together in the court below, the evidence in both cases involving the same questions of fact and law. They have been so argued here, and what we shall have to say in regard to the assignments of error in the first of the cases named in the caption, will apply also to the second.

The plaintiff in error is corporation of the state of New Jersey and on June 10th, 1911, brought an action in assumpsit against the defendant in error, in the New Jersey Supreme Court, to recover the sum of $5,193.59, alleged to be due with interest, for certain allowances or deductions from the through rate for sugar shipped in carload lots over defendant's road, from Brooklyn, New York, to trunk line points, according to the terms of the printed and published tariffs of the defendant, existing on file with the Interstate Commerce Commission and in force between the month of March, 1908, and the month of May, 1909, during which period the shipments were made.

These shipments were all in carload lots and were all to different trunk line points. They were all specified in the bill of particulars annexed to the declaration, and were not in dispute. The plaintiff paid to the defendant, upon each shipment, the full amount of the rate, as fixed in the tariff, but never received the allowance, nor was it credited with the same, as deductions, mentioned and stipulated for in the said tariff schedule.

The defendant, being a corporation of the state of Pennsylvania, removed the case to the United States Circuit Court for the District of New Jersey, and then pleaded the general issue.

The parties, waiving trial by jury, agreed that the cause should be tried by the judge, and the case came on for trial, October 8th, 1912. After the conclusion of the evidence, all of which appears in the transcript of record, the learned judge, having reserved his opinion, later filed the same, together with his findings of fact; and as a conclusion of law he also found that the allowance mentioned in the tariffs was unlawful, and directed judgment in favor of the defendant, which was accordingly, on motion, duly entered.

The court, having refused the motions of the plaintiff for judgment in its favor for the amount claimed, the plaintiff excepted thereto and assigned said refusals as error.

It appears from the findings of fact, none of which are in dispute, that the controversy was between citizens of different states, and that the amount in dispute exceeded the jurisdictional amount; that the defendant was a common carrier of passengers and commodities, and was engaged in interstate commerce; that on or before March 2, 1908, it had duly filed with the Interstate Commerce Commission, a Washington, posted and kept open for public inspection, printed tariffs, which named rates for the transportation of sugar over its line from various New York stations, including Brooklyn, to western termini of trunk lines, or points west thereof; such tariffs were kept in force and effect from the last mentioned date until May 1st, 1909, and included a provision, as follows:

'Effective at the Seaboard March 2d, 1908.

'Allowances-- Transfer of Sugar.

'51. Allowances for Transfer on sugar in carloads:

'On shipments of sugar in carloads delivered at New York, Brooklyn, N.Y., Jersey City or Hoboken stations, an allowance of two (2) cents per 100 pounds will be made for transfer, to be deducted from through rate when destined to western termini of trunk lines or points west thereof, the western termini points referred to being as follows: Allegheny, Pa.; Erie, Pa.; Salamanaca, Pa.; Bellaire, Ohio; Parkerstown, W. Va.; Black Rock, N.Y.; Buffalo, N.Y.; Dunkirk, N.Y.; Pittsburgh, Pa.; and Wheeling, W. Va.'

This provision of the tariff was not changed by the defendant until after May 1st, 1909, but on September 15th, 1908, was made applicable to shipments of sugar from all points within the lighterage limits of New York harbor.

The plaintiff was engaged in the business of refining and shipping sugar, and between March 5th, 1908, and May 1st, 1909, shipped over defendant's railroad, from Brooklyn, N.Y., to western termini of trunk lines, or points west thereof, 25,854,300 pounds of sugar, in carload lots, and paid to the defendant, by its requirement, the full rates as stated and set forth in said tariff, without any allowance or deduction therefrom of 2 cents per 100 pounds, which was never thereafter paid or refunded to the plaintiff.

'That all of the said 25,854,300 pounds of sugar were delivered by plaintiff to defendant for transportation at its said station at the Brooklyn eastern district terminal, in Brooklyn, N.Y., and that all of said sugar was by the plaintiff transferred from the refineries of the said station, by carting the same in wagons drawn by horses, at an expense to the plaintiff of at least 2 cents per 100 pounds, and the said sugar was received by the defendant at the said freight station for transportation over its line.'

The amount due to the plaintiff from the defendant, if the provision in defendant's tariff as to such allowance is lawful, was not disputed, and amounted to $5,170.86. The trial judge, however, decided as matter of law, that these allowances or deductions were unlawful, and it is to review this finding that the present writ is sued out.

It is not to be denied as a general proposition, that where a shipment is made in interstate commerce, the schedule of rates filed and posted by the shipper in conformity with the requirements of the Interstate Commerce Act, constitutes a contract between the shipper and carrier, binding upon both parties. As a corollary to this proposition, it is equally true that any amount exacted under protest from the shipper by the carrier, in excess of the rate prescribed in such schedule, for a service covered thereby, is recoverable by the shipper in assumpsit, or other appropriate action. The learned judge of the court below, without controverting either of these propositions, placed his judgment as to the law and facts upon two grounds. First, to quote from his opinion filed:

'The validity of these allowances was made the subject of investigation by the Interstate Commerce Commission, on its own motion, under section 13 of the act to regulate commerce, and on December 12th, 1908, were declared to be rebates and in violation of said acts and the acts amendatory thereof and supplementary thereto, in the matter of allowances for transfer of sugar. (Op. No. 742, 14 Interst.Com.Com'n R. 619.) No formal order annulling such allowance was entered in such cause, the Commission stating, in that behalf:

''No other will be made at this time, but the Commission will expect the carriers in question at once to conform their tariffs and practices to the purpose here announced. If this is not done, the Commission will take such steps to enforce compliance with its views in this connection, either by an order in this proceeding (jurisdiction of which is reserved for that purpose), or by such other means as it may deem advisable in the premises.'

'In obedience to such decision, the defendants desisted from making such allowances, though no corrected tariffs in conformity therewith were filed by either defendant until after the expiration of the period covered by the claims in suit. * * * The effect of the Commission's decision was to eliminate such allowances from the filed tariffs. No co-operation by the defendants was required to bring about such result. They were as much bound to refrain from making such rebates from the time of such decision until it should be reversed or its operation suspended, as if the tariffs had never contained such allowances. To do otherwise, would subject the defendants to the penalties of the Commerce Act. Such decision was equally binding upon the shippers.'

We are compelled to differ from this view, as to the legal effect of the decision and opinion of the Interstate Commerce Commission, as above referred to.

A careful reading of the Interstate Commerce Act, and its amendments, makes it quite clear that the whole subject matter of rate making and rate changing, by carriers who are subject to the provisions of the said act, was intended by Congress to be controlled, either by its direct enactments, or, by the agency of the Commerce Commission, established by it for that purpose.

In the exercise, to that end, of the plenary power to regulate commerce, conferred by the Constitution, Congress has, in the interest of the public, denounced as unlawful certain practices theretofore in vogue, some of which it has penalized as being contra bonos mores, and others, for the purpose of insuring conformity to the scheme of regulation imposed by the act and obedience to the requirements and orders of its administrative agent. So far, however, as carriers are subjected by the act to the administrative orders be enforced. In other which it establishes, that authority must be strictly...