Chicago St Ry Co v. Minneapolis Civic Commerce Ass

• Decision Date: 10 June 1918
• Docket Number: No. 283,283
• Citation: 38 S.Ct. 553,247 U.S. 490,62 L.Ed. 1229
• Parties: CHICAGO, M. & ST. P. RY. CO. et al. v. MINNEAPOLIS CIVIC & COMMERCE ASS'N
• Court: U.S. Supreme Court

247 U.S. 490

38 S.Ct. 553

62 L.Ed. 1229

CHICAGO, M. & ST. P. RY. CO. et al.

v MINNEAPOLIS CIVIC & COMMERCE ASS'N.

No. 283.

Argued May 1 and 2, 1918.

Decided June 10, 1918.

Messrs. James B. Sheean, of St. Paul, Minn., O. W. Dynes, of Chicago, Ill., F. W. Root, of Minneapolis, Minn., and Edward M. Hyzer, of Chicago, Ill., for plaintiffs in error.

Mr. Frank J. Morley, of Minneapolis, Minn., for defendant in error.

Mr. Justice CLARKE delivered the opinion of the Court.

We shall adopt the designation of the parties which is used in the record: The Chicago, Milwaukee & St. Paul Railway Company as the 'Milwaukee Company'; the Chicago, St. Paul, Minneapolis & Omaha Railway Company as the 'Omaha Company'; the Minneapolis Eastern Railway Company as the 'Eastern Company'; the Minneapolis Civic and Commerce Association as the 'Civic Association,' and the Railroad and Warehouse Commission of the State of Minnesota as the 'Commission.'

This proceeding originated in a petition filed by the Civic Association with the Commission against the three railway corporations plaintiffs in error, in which it is alleged that the tracks of the Eastern Company are mere switching or terminal facilities, in the city of Minneapolis, of the Milwaukee and Omaha Companies, and that an unreasonable extra charge is made for the receipt and delivery of cars over them. The prayer is that the plaintiffs in error be required to treat the tracks of the Eastern Company as if they were a part of the terminal systems of the Milwaukee and Omaha Companies, and that they be required to publish and maintain fair and reasonable tariffs applicable to traffic moving over them.

A hearing upon this petition resulted in findings of fact by the Commission, among others; that the Eastern Company was then operating only one mile of main track and one mile and a half of yard track and sidings in the city of Minneapolis; that the Milwaukee and Omaha Companies each owned one-half of its capital stock and were in control of its operations; and that, assuming to be an independent railroad company, the Eastern Company had filed tariffs with the Interstate Commerce Commission and with the Minnesota Commission, pursuant to which it was charging and collecting, in addition to the line rate from point of origin, an extra charge of $1.50 per car for inbound loaded cars and 10 cents per ton, with a minimum of $1.50 per car, for outbound loaded cars, moving over its tracks.

As conclusions of law the Commission found that the tracks of the Eastern Company were a part of the terminal property of the Milwaukee and Omaha Companies; that it was the legal duty of these companies to deliver cars to and to receive them from industries on the tracks of the Eastern Company without charge other than that made for the line haul; and that the extra charge which the Eastern Company was making resulted in discrimination against inbound shippers of grain to industries located upon its tracks.

Upon these findings of fact and conclusions of law the Commission entered an order, requiring that the three companies cease charging $1.50 per car for inbound shipments over either the Milwaukee or Omaha lines which are delivered over the Eastern Company's tracks to industries located upon them or to connecting carriers; that the Eastern Company cease from charging any sum for delivering carload shipments of freight moving from connecting carriers to the Milwaukee or Omaha Companies, or moving from mills and elevators located on the Eastern Company's tracks to the Milwaukee or Omaha Companies; and that the Omaha and Milwaukee companies in the future shall operate the tracks of the Eastern Company as a part of the terminal property of each of them in the city of Minneapolis. The order is made applicable only to intrastate shipments of freight.

On appeal to a state district court the order of the Commission was affirmed and adopted as the order of the court, and the decision of the Supreme Court of Minnesota affirming his judgment is now before us for review.

The contention of the railway companies in this court is stated by them 'to be reduced to the single proposition': That the Supreme Court of Minnesota erred in affirming the judgment of the district court in finding, as did the Commission that 'the tracks operated by the Eastern Company are important, convenient and necessary terminal facilities of the Milwaukee and Omaha Companies, and that these companies directly control and operate the Eastern Company.' and in adjudging, 'that the Milwaukee and Omaha Companies be required to operate the Eastern Company's tracks as a part of their terminal property at Minneapolis, without making any extra charge for moving traffic over them.'

Review by this court is prayed for on the ground that to give effect to the judgment and order of the Minnesota court will deprive each of the three railroad companies of its property without compensation and without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States, and earnestly insisting that the findings of fact upon which the judgment proceeds are without support in the evidence, the plaintiffs in error urge that it be determined from the entire record before us whether substantial evidence was introduced to sustain the denial of their claimed federal right. Interstate Amusement Co. v. Albert, 239 U. S. 560, 566, 36 Sup. Ct. 168, 60 L. Ed. 439; Jones National Bank v. Yates, 240 U. S. 541, 552, 36 Sup. Ct. 429, 60 L. Ed. 788.

Thus, the question presented for our decision is whether the Eastern Company, in form a corporate entity, separate and distinct from the Milwaukee and Omaha Companies, is in reality an independent carrier, exercising an independent control over the railroad to which it holds the legal title and over the conduct of its business affairs, or whether it is a mere agency or instrumentality of the two corporations, which own all of its capital stock through which they collect an extra charge from the public for rendering by indirection a service which as common carriers they are legally required to render without such charge under the conditions of operation which prevail at Minneapolis.

It is obvious that this is a mixed question of fact and of law, and from the findings of fact made by the Commission and by the district court, which differ only in unimportant details, and from evidence undisputed in the record, we derive the following statement, which we think embraces all that is essential to a decision of the case:

The Eastern Company is a Minnesota corporation, with an authorized capital stock of $1,000,000, organized in 1878 for the declared purpose of building and operating a railroad from the city of Minneapolis to the city of St. Paul, with branches connecting with all railroads now built or hereafter to be built to or into said cities, and with branches to the mills and manufacturing establishments located therein.

The formal organization of the company was by a group of millowners, but before any right of way was acquired or construction work done the Milwaukee and Omaha Companies came into exclusive control of the corporation and a board of directors satisfactory to them was elected, with the result that the only road which the company ever built or operated (omitting small fractions) was one mile of main track and one mile and a half of yard track and sidings in the city of Minneapolis. At the time of the trial the Eastern Company served several mills and warehouses and one elevator, it had no stations or freight depots, its only rolling stock was two engines, and the average number of its employes varied from 20 to 30 men. Its tracks are used for interchange by the Milwaukee and Omaha lines, but other companies use them for this purpose to such a limited extent, that the part of the Commission's order relating to such use is neglected in the evidence and arguments and in the decisions of the state courts.

Almost immediately a ter the organization of the Eastern Company, the three companies entered into a written contract, effective for over 39 years, until May 1, 1918, which is of much significance in determining the decisive fact in the case, as we have stated it.

This contract provides:

(1) That only 300 shares of the authorized 10,000 shares of capital stock of the Eastern Company shall be issued, and, of these, 75 shares each must be issued to the Omaha and Milwaukee Companies, 145 shares to a trustee for the Eastern Company, and the remaining 5 shares shall be...