Erie R. Co. v. United States

• Decision Date: 26 December 1928
• Docket Number: No. 3746.,3746.
• Citation: 32 F.2d 613
• Parties: ERIE R. CO. et al. v. UNITED STATES.
• Court: U.S. District Court — District of New Jersey

32 F.2d 613 (1928)

ERIE R. CO. et al. v. UNITED STATES.

No. 3746.

District Court, D. New Jersey.

December 26, 1928.

Herbert A. Taylor, Marion B. Pierce, both of New York City, and George S. Hobart, of Newark, N. J., for petitioners.

Elmer B. Collins, Sp. Asst. Atty. Gen.

E. M. Reidy, of Washington, D. C., for Interstate Commerce Commission.

Before DAVIS, Circuit Judge, and RELLSTAB and BODINE, District Judges.

BODINE, District Judge.

This is an application for a temporary and permanent injunction restraining the enforcement of, and annulling and setting aside, a certain order of the Interstate Commerce Commission dated November 2, 1928, requiring the Erie Railroad Company and the Hoboken Manufacturers' Railroad Company to publish and maintain on or before January 10, 1929, a rate of 10 cents per 100 pounds from Hoboken, N. J., to Garfield, N. J., for the transportation of wood pulp, in carloads, which has at some time lately been imported into the United States from a foreign country.

The jurisdiction of this court to hear and determine is conceded.

The Hammersley Manufacturing Company, which instigated the proceeding before the Interstate Commerce Commission, is engaged in the manufacture of paper at Garfield, N. J. It requires in its business wood pulp. The wood pulp comes from abroad, principally from German ports. Messrs. J. Andersen & Co. and Ira L. Beebe & Co., both of New York, appear to be brokers for the foreign producers of wood pulp and also brokers through whom the American manufacturers of paper purchase the pulp as required.

When the Hammersley Manufacturing Company requires pulp it enters into a contract of purchase with J. Andersen & Co. or Ira L. Beebe & Co., which, so far as pertinent, states that Andersen & Co. or Beebe & Co. have sold to the Hammersley Manufacturing Company a given quantity of wood pulp, designated by its German name, delivery ex-dock New York (Harbor), shipments from abroad. When the pulp arrives it is loaded upon the cars of the Erie Railroad Company at Hoboken. It is a fact that German vessels generally dock on the New Jersey side of New York Harbor. The railroad company issues bills of lading for shipments from Hoboken to Garfield.

The transaction between the Hammersley Manufacturing Company and the brokers resulting in the contract referred to originates either by the offer by the New York broker to sell or the offer by the Hammersley Manufacturing Company to buy. The New York brokers cable the German producers the terms of the offer and the names of the customers, and the New York broker, before entering into the contract with the American manufacturer, receives a reply cable of confirmation before executing the contracts. The foreign bills of lading are addressed to the New York brokers, who pay for the pulp when it is on the ship in the foreign port. Pulp which is to be distributed to several manufacturers in the United States is shipped in bulk under one bill of lading to the New York brokers, who distribute it in accordance with the terms of the contracts which they have previously made.

Everything which is done with the pulp after its arrival in the United States is controlled by the New York broker. He has paid for the pulp at the foreign port. It is his pulp. He can assign it in accordance with his contracts, or, if he repudiates his contracts, he would have to stand suit upon them. The railroad company has nothing to do with determining the ultimate destination of the pulp. The New York brokers make the contracts with the railroad company for the delivery of the pulp from the ship to its ultimate destination.

The position of the Erie Railroad Company and the Hoboken Manufacturers' Railroad Company is that the Commission is without power to fix a rate for the transportation of wood pulp in carload lots from Hoboken, N. J., to Garfield, N. J., under the facts in this particular case.

In Gulf, Colorado & Santa Fé R. Co. v. Texas, 204 U. S. 403 at 412, 27 S. Ct. 360, 51 L. Ed. 540, the single question was whether a shipment of corn between Texarkana, Tex., to Goldthwaite, Tex., was an interstate or intrastate shipment. The Supreme Court held that this question was determined by the original contract of shipment, and that the contract governed until it was changed by the agreement of the owner and the carrier.

This rule was somewhat modified by subsequent decisions of the Supreme Court, and in Baltimore & O. S. W. R. Co. v. Settle et al., 260 U. S. 166, at 170, 43 S. Ct. 28, 30 (67 L. Ed. 189), Mr. Justice Brandeis stated:

"Whether the interstate or the intrastate tariff is applicable depends upon the essential character of the movement. That the contract between shipper and carrier does not necessarily determine the character was settled by a series of cases in which the subject received much consideration. Southern Pacific Terminal Co. v. Interstate Commerce Commission, 219 U. S. 498 31 S. Ct. 279, 55 L. Ed. 310; Ohio Railroad Commission v. Worthington, 225 U. S. 101 32 S. Ct. 653, 56 L. Ed. 1004; Texas & New Orleans R. R. Co. v. Sabine Tram Co., 227 U. S. 111 33 S. Ct. 229, 57 L. Ed. 442; Railroad Commission of Louisiana v. Texas & Pacific Ry. Co., 229 U. S. 336 33 S. Ct. 837, 57 L. Ed. 1215. And in Baer Bros....