Baltimore Co v. United States

• Court: U.S. Supreme Court
• Writing for the Court: BUTLER
• Citation: Baltimore Co v. United States, 277 U.S. 291, 48 S.Ct. 520, 72 L.Ed. 885 (1928)
• Decision Date: 21 May 1928
• Docket Number: No. 404,404
• Parties: BALTIMORE & O. R. CO. et al. v. UNITED STATES et al

277 U.S. 291

48 S.Ct. 520

72 L.Ed. 885

BALTIMORE & O. R. CO. et al.

v UNITED STATES et al.

No. 404.

Argued April 11, 1928.

Decided May 21, 1928.

[Syllabus from pages 291-293 intentionally omitted] Messrs. Morison R. Waite, of Cincinnati, Ohio, and Homer T. Dick and Elmer A. Smith, both of Chicago, Ill., for appellants.

Mr. Blackburn Esterline, of Washington, D. C., for the United States.

Mr. J. Stanley Payne, of Washington, D. C., for Interstate Commerce Commission.

Mr. M. G. Roberts, of St. Louis, Mo., for West Side Lines.

Mr. Justice BUTLER delivered the opinion of the Court.

The appellants,¹ for convenience called the east side lines, brought this suit to set aside an order of the Interstate Commerce Commission in respect of charges for transporting certain westbound through traffic from the lines east of the Mississippi at East St. Louis to the lines west of the river at St. Louis. The Commission and the carriers on whose complaint the order was made intervened. The District Court, consisting of three judges (U. S. C. tit. 28, § 47 (28 USCA § 47)), dismissed the case for want of equity.

The order was made by the Commission after hearing on the complaint of four west side lines. They alleged that the practice of the east side lines requiring them to bear the expenses of transporting westbound through traffic across the river is unjust, unreasonable and illegal. They made no complaint as to the east-bound traffic, but they sought to be relieved from such charges on all the westbound through business and prayed reparation on account of such costs borne in the two years preceding the complaint. The Commission filed a report which was made a part of the order. 113 I. C. C. 681. It held-its chairman and two other members dissenting-that the matter in controversy is a 'practice' within the meaning of the act. It found:

'That for the future the practice of the east side lines in requiring the west side lines to bear the transfer charges on westbound freight traffic moving through St. Louis and East St. Louis on combination rates which are the same on St. Louis as on East St. Louis will be unjust and unreasonable, and that the just and reasonable practice with respect to such traffic will be for the east side lines to bear or absorb all such transfer charges.'

The Commission was not convinced that the acceptance by the west side lines of divisions of joint rates did not constitute an acquiescence, tantamount to an agreement on their part to pay a transfer charge on through traffic moved on such rates. But it commended to the carriers a careful study of the divisions of joint rates on west-bound traffic with a view to readjustment if necessary to conform to the just and reasonable practice in respect of interchange approved by the report. Reparation was denied.

The order² requires no change of divisions of revenues derived from traffic moving on joint rates. It covers only such of the west-bound traffic as moves on combination through rates. It shifts from the west side lines to the carriers east of the river the burden of transferring that freight from east to west across the river. No change is ordered in the method of handling the traffic. No lack of facilities for the through routes, section 1(3), (4), 49 USCA § 1(3), (4); Comp. St. 8563(3), (4), or for making the transfers, secton 3(3), 49 USCA § 3(3), Comp. St. § 8565(3), was shown or found.

The appellants contend that the controversy involved rates and divisions and not a 'practice' within the meaning of the act, and that the evidence before the Commission was not sufficient to support a finding that it is or will be unjust or unreasonable to require the west side lines to bear such transfer charges or to warrant the order.

The traffic at this crossing is very large. The railroad lines of the east side carriers terminate on the east bank, those of the appellee carriers on the west bank, and some carriers have lines on both sides. All, or practically all, of the traffic is handled for interchange between lines east and lines west by the Terminal Railroad Association and its subsidiaries. They are jointly owned or controlled by appellant and appellee lines. The arrangements for their use contemplate equal treatment of all carriers served by them. The proprietary companies have trackage rights over the lines of the association between St. Louis and East St. Louis, but ordinarily dinarily they do not use them. The average haul for transfer across the river is about 10 miles. The cost is higher than that attending transportation for like distances under ordinary circumstances.

The transfer charges complained of were assumed by appellee lines in order to enable them to compete with other railroads west of the Mississippi river. At first there was a separate rate or charge for the haul across the river. But in 1877, the Chicago & Alton Railroad Company built a line from the west across the Mississippi at Louisiana, Mo., to a junction with its north and south line east of the river. That extension enabled it to open a route from the west to East St. Louis and there interchange with the east side lines. This competition for the haul between East St. Louis and the territory west of St. Louis compelled the four appellee lines to bear the cost of transferring across the river all through traffic in both directions. The commission's report shows that now five of the eight lines on the west side that serve St. Louis also reach East St. Louis, and that three of them handle freight traffic to points west of the river without taking it through St. Louis. This is competition that must be met-if they would participate in the business-by the west side lines that reach East St. Louis only by means of the facilities and services of the association and its subsidiaries. Since the Alton opened its route to the west, the appellee lines have maintained the same rates from and to East St. Louis as from and to St. Louis. And, about 1908, upon the insistence of the business interests of St. Louis, the lines east of the river published and have since maintained, with some exceptions that need not be specified, the same rates from and to St. Louis as from and to East St. Louis. This was done by reducing the rates to and from St. Louis and by advancing most of the rates to and from East St. Louis. The decrease in revenue resulting from the reductions was much greater than the increase arising from the advances.

In 1905 the United States brought suit against the Terminal Railroad Association, carriers involved in this controversy and others in the district court for the eastern district of Missouri to prevent violations of the Sherman Anti-Trust Act (15 USCA §§ 1-7, 15). A final decree in favor of the United States was entered in 1917 in accordance with the directions of this court. 224 U. S. 383, 32 S. Ct. 507, 56 L. Ed. 810; Id., 236 U. S. 194, 35 S. Ct. 408, 59 L. Ed. 535. On petition filed in that case by the appellee lines some years after the final decree, the District Court, February 8, 1923, adjudged that in contempt of its decree the association, its subsidiaries and proprietary companies had continuously compelled the appellee lines to pay transfer charges for interchange between them and the east side lines on through traffic in both directions. It directed the east side lines to cease such violations and to pay for the use of the west side lines the total amount of the charges paid by the latter for the transfer of westbound through freight from March 2, 1914, to the date of the order. The east side lines and other companies so adjudged in contempt appealed; and, on October 13, 1924, this court held that the original decree did not regulate rates, prescribe divisions of joint rates or fix liability for the transfer charges; that contempt proceedings did not lie to de- termine the controversy between the east side lines and the west side lines or to require the former to make the payments ordered. Terminal Railroad Ass'n v. United States, 266 U. S. 17, 29, et seq., 45 S. Ct. 5, 69 L. Ed. 150.

The Commission's report states that the question before it was 'whether the east side lines or the west side lines should bear the expense incident to the transfer across the Mississippi river from East St. Louis, Ill., to St. Louis, Mo., of practically all carload and less-than-carload through freight originating east of the St. Louis-East St. Louis district and destined west thereof.' And the thing ordered by the Commission is the absorption by the east side lines of the transfer charges on west-bound through traffic. It directed them to do exactly what the District Court required them to do except that the latter's decree related to the past and the order of the Commission relates to the future. The matters in controversy in both proceedings were purely financial. There was no question concerning furnishing of facilities or the handling of traffic.

The larger part of the through traffic interchanged through the East St. Louis-St. Louis gateway moves on joint rates; and, for the purpose of divisions among participating carriers, these rates are...