Chapman & Dewey Lumber Co. v. Jonesboro, Lake City & Eastern Railroad Co.

• Decision Date: 23 January 1911
• Citation: 133 S.W. 1119,97 Ark. 300
• Parties: CHAPMAN & DEWEY LUMBER COMPANY v. JONESBORO, LAKE CITY & EASTERN RAILROAD COMPANY
• Court: Arkansas Supreme Court

133 S.W. 1119

97 Ark. 300

CHAPMAN & DEWEY LUMBER COMPANY v. JONESBORO, LAKE CITY & EASTERN RAILROAD COMPANY

Supreme Court of Arkansas

January 23, 1911

Appeal from Poinsett Circuit Court; Charles Coffin, Judge on exchange; reversed.

Judgment reversed and cause remanded.

Percy & Hughes, for appellant.

1. Where an excessive freight rate is demanded by the carrier the shipper may pay it under protest and recover the excess. 4 Elliott on Railroads, § 1564 and cases cited; 2 Hutchinson on Carriers, (3 ed.) 805, § 574 and cases cited; 6 L. R. A. (N. S.) 225; 25 W.Va. 434.

2. The tariff fixed by the railroad commission does not affect interstate shipments. Whether a shipment is local or interstate depends upon the contract for transportation. This contract, whether in form of a bill of lading, or otherwise is the determining factor. Barnes' Interstate Transportation, 69; Watkins, Shippers and Carriers, 90; 162 U.S. 192. It can not be reasonably contended that these shipments from the point of origin to Jonesboro, both points being wholly within the State, form parts of interstate shipments because the finished product may afterwards be shipped out of the State. Even an intention on the part of the shipper so to forward the product would not make the first shipment part of an interstate journey. It is only when a shipment actually begins for a destination to some point beyond the limits of the State that it assumes an interstate character. 209 U.S. 405; 217 U.S. 413; 8 Wall. 168; 155 U.S 648; 116 U.S. 517; 188 U.S. 82; 204 U.S. 403; 209 U.S. 211; 93 Va. 749; 34 L. R. A. 105.

3. As to the rate being noncompensatory, the burden of proof was on the appellee to establish that fact, and that burden has not been met, as appears by the record, and the refusal of the trial court to pass upon that question. But the question of the reasonableness of this rate is not open here. It arises upon a particular rate, and it is well settled that a carrier may be compelled to do some things at a loss, and that all it is entitled to receive is a fair return upon its aggregate business. 54 Ark. 112; 156 U.S. 649; 60 Ark. 244. The law requires the complaining party to go first to the railroad commission, in whom is vested the power to prescribe rates, to obtain any changes therein; but, so long as a rate stands as the tariff rate, both parties are bound by it. 204 U.S. 426; Kirby's Digest, §§ 6803, 6809.

W. A. Falconer, amicus curiae, for the Arkansas Railroad Commission.

1. Appellee's first reason for contending that the commission's order is not applicable as between appellant and appellee, viz., that appellant did not and could not offer for outbound shipment the proportion of finished product required by the order itself, is fully answered by the court finding that "plaintiff offered continually to contract to give the defendant the outbound product at the percentage fixed on box shooks in the railroad commission's tariff order."

The unsoundness of its second objection, that appellee's plant was on the tracks of another railroad and that a joint haul was therefore involved, is shown in the fact that appellee of its own motion petitioned the commission to make the rough material rate apply to it, although all the wood-working factories were then, as now, located on other tracks. It is estopped to raise this objection. 203 U.S. 49. See also 211 U.S. 611, 53 Law. Ed. 352.

2. The order is not invalid under the Federal Constitution, either as fixing a rate which is noncompensatory, or as attempting to regulate interstate commerce. There is no satisfactory proof that the rate is confiscatory. Moreover, this claim is discredited by the fact that appellee obtained permission to apply this rate, and did apply it to some, while denying it to appellant. It will not be permitted to discriminate or to plead confiscation or a regulation of interstate commerce under these circumstances. 203 U.S. 49; 211 U.S. 611.

The order is in no sense a regulation of interstate commerce. 84 Ark. 253; 204 U.S. 403; 85 F. 435.

E. Foster Brown, Hawthorne & Hawthorne and Moore, Smith & Moore, for appellee.

1. Rough material rates are not applicable where the manufacturing plant is not located on the line of road bringing in the rough material, or where a joint shipment is necessary to transport either the rough material to or the finished product from the manufacturing plant.

2. The finished products of appellant's manufacturing plant are forwarded to points beyond the State, and the movements of the rough material to its mill and the subsequent forwarding of the finished product to points beyond the State constitute interstate commerce in the commodity, and the rough material rates of the Arkansas Railroad Commission are not applicable. Barnes, Interstate Trans., §§ 224, 222; 16 I. C. C. R. 232; 9 Id. 316; 8 Id. 121; 7 Id. 240; 10 Id. 193; 188 U.S. 1; 202 U.S. 543.

3. If the rough material rates are applicable, then the rate of two cents per hundredweight on rough lumber is noncompensatory, and the charge made of five cents per hundred weight for the haul of the rough lumber was not an unreasonable or unjust charge. Art 2, § 8, 13. Const. Ark.; Fourteenth Amendment Const. U. S.; 85 Ark. 12; 209 U.S. 164; 156 U.S. 649; 206 U.S. 933; 179 U.S. 287; 173 U.S. 684; 109 U.S. 466; 186 U.S. 257; 91 Ark. 358; 118 F. 422; 172 U.S. 269; 80 Ark. 540.

OPINION

FRAUENTHAL, J.

This was an action instituted by the Chapman & Dewey Lumber Company, the plaintiff below, to recover the amount of certain freight charges in excess of the legal rates which it claimed that it was compelled to pay to the defendant for the transportation of its property. The defendant is a domestic railroad corporation, and owns and, as a common carrier, operates a line of railroad which is situated entirely within the State of Arkansas and extends from the city of Jonesboro to Barfield, in Mississippi County, and also to Osceola in the same county. Between these stations there are located on said line of railroad intermediate stations, among which, are Black Oak, Monett and Wheeler, situated within a distance of less than 25 miles from Jonesboro; and from these stations defendant is engaged as a common carrier in transporting logs and rough lumber on its railroad to the city of Jonesboro. The plaintiff is a corporation engaged in the manufacture of rough lumber into box shooks, which consist of the ends, sides, tops and bottoms of a box bound together in packages; and its factory at which it manufactures these box shooks is situated in the city of Jonesboro.

Its box factory is located on the line of railroad of the St. Louis & San Francisco Railroad Company, about one mile distant from the terminus of the line of defendant's railroad in said city, where it has physical connection with said line of railroad of the St. Louis & San Francisco Railroad Company by means of a switch. The plaintiff obtained its rough lumber at the above stations of Black Oak, Monett and Wheeler, and shipped same from said points over defendant's line of railroad to Jonesboro; and all said shipments were transported by defendant from said stations to the terminus of its line in Jonesboro, which were named in the bills of lading issued therefor as the points of origin and destination; and said terminus was the final point to which the defendant agreed to transport the lumber. Upon their arrival at said terminus of defendant's line in Jonesboro the shipments were switched to the plaintiff's factory, and the plaintiff paid the switching charges in addition to the transportation charges. The plaintiff manufactured 95 per cent. of said rough lumber into said box shooks, and actually sold and shipped such manufactured product to parties and places outside of the State of Arkansas; the remaining five per cent. was first-grade lumber, and was disposed of to parties without the State.

It appears that there are located at Jonesboro a number of plants which are engaged in manufacturing rough lumber and logs into finished products of various kinds. On April 1, 1907, the railroad commission of Arkansas made an order fixing the freight rates on rough lumber moving on railroads wholly within the State, and therein provided that such rate should be two cents per hundred pounds for transportation thereof for a distance of from one to 50 miles, inclusive, in cars of 40,000 minimum weight. Said order also provided:

"The above-named rates are conditioned upon the manufactured product being reshipped over the same line bringing in the rough material, and may be only used subject to the following conditions: The proportion of the tonnage of outbound manufactured product to the tonnage of inbound rough material shall not be less than the following:

* * * *

"The rates above named are intended to be used as rough material rates only, and carriers will be allowed by the commission to require consignees desiring to avail themselves of the benefit of same to enter into a suitable contract with reference to the reshipment of the specified percentage of the finished product. Provided, the terms of said contract must be satisfactory to and approved by the commission. Provided further, that in no case shall the contract provide for a higher rate on inbound shipments than outlined in the above table.

"The rates provided in this order do not include switching charges at point of shipment, or at destination. All such charges will be assessed and collected in addition to the regular freight charges.

"The rates provided in this order shall not apply to joint shipments."

In March, 1908, the defendant applied to the commission requesting it to make an order specifically extending the above order to the defendant and the traffic upon its line of...