Atlantic Coast Line Co v. Standard Oil Co of Kentucky Standard Oil Co Incorporated In Kentucky v. Atlantic Coast Line Co, s. 176

• Decision Date: 28 November 1927
• Docket Number: 177,Nos. 176,s. 176
• Citation: 48 S.Ct. 107,72 L.Ed. 270,275 U.S. 257
• Parties: ATLANTIC COAST LINE R. CO. v. STANDARD OIL CO. OF KENTUCKY. STANDARD OIL CO., INCORPORATED IN KENTUCKY, v. ATLANTIC COAST LINE R. CO
• Court: U.S. Supreme Court

275 U.S. 257

48 S.Ct. 107

72 L.Ed. 270

ATLANTIC COAST LINE R. CO.

v STANDARD OIL CO. OF KENTUCKY.

STANDARD OIL CO., INCORPORATED IN KENTUCKY,

v. ATLANTIC COAST LINE R. CO.

Nos. 176, 177.

Argued Oct. 4, 1927.

Decided Nov. 28, 1927.

[Syllabus from pages 257-259 intentionally omitted] Messrs. Thomas W. Davis, of Wilmington, N. C., and Helm Bruce, of Louisville, Ky., for Atlantic Coast Line R. Co.

Messrs. Charles G. Middleton, Edward P. Humphrey, and William W. Crawford, all of Louisville, Ky., for Standard Oil Co.

[Argument of Counsel from page 260 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.

This case comes here for review on petitions for certiorari to the United States Circuit Court of Appeals for the Sixth Circuit by both parties, allowed March 21, 1927. Atlantic Coast Line R. Co. v. State of Florida ex rel. Burr, 273 U. S. 691, 47 S. Ct. 475, 71 L. Ed. 842. The District Court's opinion is reported in 13 F.(2d) 633; that of the Circuit Court of Appeals in 16 F.(2d) 441.

The case was begun by a bill in equity filed by the Standard Oil Company, a corporation of Kentucky, in the District Court for the Western District of Kentucky, against the Atlantic Coast Line Railroad Company, a corporation of Virginia, to secure an injunction forbidding the defendant from charging the complainant for the transportation of gasoline, refined oil, lubricating oil, and fuel oil from the cities of Port Tampa, Tampa, and Jacksonville, all in Florida, to other points in the same state at rates of freight other than the lawfully established intrastate rates for such commodities.

The bill avers that since June 15, 1923, the defendant railroad company has refused to accept shipments of the complainant from Port Tampa, Tampa, and Jacksonville, Fla., to other points within the state, at intrastate rates, and has compelled the complainant to pay thereon higher interstate rates, which it has done under protest; that according to the records of the complainant it has already overpaid to the defendant, between June 15, 1923, and April 17, 1925, the sum of $63,000. The prayer is for a temporary injunction, and that, if the merits of the case are adjudged in favor of the complainant, a permanent injunction be granted and the case be referred to a special master to determine the overcharges, and that a judgment be entered therefor with interest at 6 per cent. from the date the same were accepted by the defendant until paid.

The answer denies that the charges collected were for other than interstate business. A motion to dismiss was made, on the ground that the complainant had an adequate remedy either at the common law or under a special remedy provided by the Florida statute. This motion to dismiss was overruled by the District Court (Standard Oil Company v. Atlantic Coast Line Railroad Co., 13 F.(2d) 633), and while on appeal error was assigned for this, it does not appear to have been considered by the Circuit Court of Appeals (Atlantic Coast Line R. Co. v. Standard Oil Co. of Kentucky, 16 F.(2d) 441), and is not assigned for error here. The jurisdiction rests on diverse citizenship of the parties, and the only question before us is upon the merits.

The plaintiff maintains at Port Tampa, Tampa, and Jacksonville large storage facilities, consisting of tanks and warehouses for receiving and storing gasoline, refined oil, lubricating oil, and fuel oil. It does not produce or refine any of these products. Gasoline, refined oil, and lubricating oil it buys from the Standard Oil Company of Louisiana, from its refineries at Baton Rouge, La., while the fuel oil it buys from the Standard Oil Company of New Jersey, from Tampico, Mexico. These four varieties of oil products are brought into Port Tampa and Jacksonville in tank steamers owned and chartered by the sellers, and, with the exception of lubricating oil, the oil is pumped by ships' pumps from the steamers through pipe lines owned by the plaintiff into plaintiff's storage tanks at Port Tampa and at St. Johns river terminal, Jacksonville, Fla. Lubricating oil is pumped from the tank steamers by ships' pumps into tank cars at Port Tampa, or at Jacksonville, and by them conveyed, respectively, over defendant's lines to plaintiff's storage tanks at Tampa, a distance of about nine miles from Port Tampa, or to Kings Road, a distance of about two miles from St. Johns river terminal, near Jacksonville. All the products are purchased by the plaintiff to be delivered to it by the sellers at Port Tampa and Jacksonville, title not passing to the plaintiff until the products have been so delivered, settlement between the seller and purchaser being made upon the basis of the amount actually delivered into tank cars and tanks. The prices to be paid for gasoline, refined oil, and lubricating oil are the current market prices in effect at the time the products are delivered to plaintiff at Port Tampa and Jacksonville. Fuel oil is purchased on yearly contracts at stipulated prices. The tank cars used by the plaintiff in its business are not owned by the railroad company, but are leased by the plaintiff and hauled by the defendant over its lines in common carrier service.

At Port Tampa plaintiff maintains for the storage of gasoline five tanks, with an aggregate capacity of 110,000 barrels; for refined oil, storage tanks with a total capacity of 20,000 barrels; and for fuel oil, tanks with a total capacity of 127,000 barrels. At Jacksonville it maintains for the storage of gasoline, tanks with a total capacity of 162,000 barrels; for refined oil, storage tanks with a capacity of 40,000 barrels; and for fuel oil, storage tanks with a total capacity of 145,000 barrels.

Throughout Florida the plaintiff maintains 123 bulk stations, where it has sufficient tankage and storage facilities for gasoline, refined oil, and lubricating oil to meet the current needs of its customers supplied from such stations. These stations ordinarily get their supply of gasoline and refined oil from the storage tanks maintained at Port Tampa and Jacksonville, by means of tank cars. Very little, if any, gasoline or refined oil is delivered to consumers directly from the storage tanks at Port Tampa and Jacksonville. The gasoline and refined oils are delivered from the bulk stations to plaintiff's consumers by means of tank wagons. Plaintiff also maintains a large number of service stations in the state of Florida, which, in the usual course of business, are supplied with gasoline and refined oil directly from the bulk stations, although occasionally a service station is supplied with gasoline supplied in tank cars directly from Port Tampa and Jacksonville.

Under ordinary business conditions plaintiff keeps in its storage tanks at Port Tampa and at Jacksonville a sufficient supply of gasoline and refined oil to take care of its requirements for from 45 to 60 days, a sufficient supply of fuel oil for from 30 to 60 days, and in its storage tanks at Tampa and at Kings Road a sufficient supply of lubricating oil for from 60 to 90 days, the exact time depending entirely upon business conditions and demands for the products in that section of the state. The plaintiff pays local taxes to the state of Florida on all of its products in hand in its storage tanks on the Florida assessing dates.

After the lubricating oil is placed in the storage tanks at Tampa and at Kings Road, it is distributed and sold in tank wagons, barrels, and smaller containers, although a small percentage of same is sent out in tank wagon cars to plaintiff's bulk stations and possibly to some small consumers.

The fuel oil is furnished by the Standard Oil Company of New Jersey to the plaintiff under a yearly contract for a million barrels to be delivered monthly in tank steamers at Port Tampa and Jacksonville as needed. Approximately 95 per cent. of the fuel oil sold by plaintiff in Florida is on contracts made before the oil has been shipped from the point of origin to plaintiff at Port Tampa and Jacksonville. Most of these are for a period of a year, covering the requirements of the various consumers, with average monthly deliveries stipulated, although in actual practice shipments from the storage tanks to the consumers are accommodated to their needs as under requirement contracts. There is no separation of the fuel oil under contract from that not under contract, all being of the same grade. At the time the shipment of the fuel oil is made from the point of origin, plaintiff cannot say where any particular cargo of same, or any part thereof, will go after it has been pumped into the storage tanks, to whom it will go, or when it will be shipped. At the time of shipment from the point of origin, the only destinations which can be given are Port Tampa and Jacksonville, respectively.

The railway company has nothing to do with the boat movement of the products used by the plaintiff in its Florida business. There is no through rate and no joint arrangement of any character between the water carrier and the defendant. Movement by boat, while interstate commerce, is not actually under regulation by the Interstate Commerce Commission. From two to four boats per month, with an average capacity of 45,000 barrels each, discharge their cargoes in plaintiff's storage facilities at Port Tampa and Jacksonville. A boat requires from one to three days to discharge its cargo, and while boats are engaged in discharging their cargoes into the storage tanks of plaintiff, tank cars are being loaded from the same storage tanks, for the purpose of supplying plaintiff's bulk stations, service stations, and possibly a small amount directly to some consumers.

Plaintiff has been conducting its business in the manner here stated for many years, and it was not adopted for the purpose of evading the payment of interstate rates. Its business could not be conducted without the storage facilities herein described, and until June 15, 1923, all...