Foster Lumber Co. v. Atchison, Topeka & Santa Fe Railway Co.
| Decision Date | 10 April 1917 |
| Parties | FOSTER LUMBER COMPANY v. ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. W. A. Thomas, Judge.
Reversed.
Thomas R. Morrow, Cyrus Crane, George J. Mersereau and John H Lathrop for appellants.
(1) The alleged agreement or arrangement by which the railway companies were to pay to the lumber company one-half of their proportion of the interstate freight charges on the shipments in question, constitutes one of the devices prohibited by the Interstate Commerce Act, and by reason thereof, the claim herein sued upon is void, illegal and unenforcible, and plaintiff cannot, therefore, recover in this case. Intertsate Commerce Act, Act of Congress, February 4, 1887 (24 Stat. L 379), Act of March 4, 1889 (25 Stat. L. 855) and Elkins Act, Act of February 14, 1903 (32 Stat. L. 847), and Hepburn Act, Act of June 29, 1906 (34 Stat. L. 584); United States v. Union Stock Yards, 226 U.S. 286; Fourche River Lbr. Co. v. Bryant Lbr. Co., 230 U.S. 316; Railroad v. Goodridge, 149 U.S. 680; Railroad v. Interstate Commerce Comm., 200 U.S. 361; White v. United States, 167 U.S. 512; Packing Co. v. United States, 209 U.S. 56; Railroad v. United States, 212 U.S. 481; Railroad v. United States, 212 U.S. 500; Railroad v. Commission Co., 223 U.S. 573; Int. Com. Com. v. Railroad, 225 U.S. 326; Railroad v. Lumber Co., 174 F. 107; Railroad v. United States, 162 F. 835. (2) Since the passage of the Interstate Commerce Act, Congress has taken complete charge of the fixing of rates and the other terms upon which persons and property may be transported in interstate commerce. It has also fixed penalties for the violation of the Interstate Commerce Act and its amendments. The construction to be given these acts is determined by the United States Supreme Court and other Federal Courts, and such decisions are binding upon all State tribunals. Donovan v. Wells Fargo, 265 Mo. 291; Haseltine v. Bank, 155 Mo. 74; Briggs v. Holmstrong, 72 Mo. 337; Asphalt Co. v. French, 158 Mo. 539; Railway v. Stone Co., 154 S.W. 465.
Halbert H. McClure and Ellison A. Neel for respondent; Hadley, Cooper, Neel & Wilson of counsel.
(1) It is not disputed by plaintiff that a contract to receive a rebate or payment back of part of freight charges collected from it is unlawful under the Interstate Commerce Act, but it is contended by respondent in this case that the contract in question is no such contract. (2) It is the duty of the court to leave the construction of an oral contract to the determination of the jury under appropriate instructions and where the evidence as to the intention of the parties is conflicting, it is a question for the jury. Lime Co. v. Roofing Co., 77 Mo.App. 26; Soap Works v. Sayers, 55 Mo.App. 16; Railroad v. Griffin, 126 F. 364; Durham v. Hastins P. Co., 67 N.Y. 632; Terra Cotta Co. v. Supply Co., 18 F. 332. (3) Where there is any conflict of evidence as to the intention of the parties to a contract, the court cannot declare the contract illegal as a matter of law. Railroad v. Griffin, 126 F. 364. (4) There is no law or statute prohibiting a railroad company from making a contract with any other corporation or party to pay a consideration in return for value received by the railroad company, even though the other party may be a shipper over the railroad, unless it be a subterfuge to pay a rebate. Lumber Co. v. Spencer, 86 F. 846; Rothschild v. Railroad, 15 Mo.App. 242; United States v. Milwaukee R. & T. Co., 145 F. 1007; Shanberg v. Railroad, 3 I. C. C. 502; Smith v. Railroad, 1 I. C. C. 611; United States v. Railroad, 152 F. 269; Interstate Commerce Comm. v. Railroad, 128 Fed 59; Batsell v. Railroad, 23 S.W. 552; Railroad v. Ft. Scott, 15 Kan. 435. (5) The mere fact that the freight rate was referred to in arriving at an amount to be paid by the railroad company to the lumber company for the building of the mill does not imprint the money to be paid the lumber company as a part of the freight rate money. DeWinter v. Thomas, 27 L. R. A. (N. S.) 634. (6) The contract in question was no contract with reference to railroad rates at all, but was a plain, simple contract to pay the lumber company a certain amount of money, in consideration of its locating the lumber mills adjacent to its right-of-way, which resulted in the building of a town along its right-of-way and the increasing of the business of the railroad company, and the fact that the freight upon the machinery to build the mill was referred to in arriving at the amount of money to be paid by the railroad to the lumber company, in no way invalidated said contract. Authorities as under point 4. (7) Even under appellant's theory of this case, the contract would not be unenforcible, as the rate must be both established, filed, posted and published to be a valid rate, and it nowhere appears that the rates in question were ever filed with the Commerce Commission, or posted. U. S. Compiled Statutes, 1910, Supp. 1909, p. 1138 (Interstate Commerce Act); Armour v. United States, 153 F. 1; United State v. Wood, 145 F. 409; Railroad v. Sloop, 200 Mo. 214; Griffin v. Railroad, 115 Mo.App. 554.
The suit is for damages for breach of contract.
The plaintiff obtained judgment in the circuit court of Jackson County for the sum of $ 4572.54, and after an appeal to the Kansas City Court of Appeals the cause was transferred to this court on motion of the appellants on the ground that the construction of the Fourteenth Amendment to the Constitution of the United States and of section 30, article 2, of the Constitution of Missouri, was involved.
Plaintiff was a corporation engaged in the manufacture and sale of lumber, with headquarters at Houston, in the State of Texas. The petition, filed March 24, 1910, alleges that in the middle of the year 1905 the plaintiff desired to erect large mills for the manufacture of lumber at Clinesburg, in the State of Texas; that the defendants desired to have such mills erected so they "might obtain freight from the hauling of the lumber" so manufactured; the defendants in order to induce the plaintiffs to erect the mills at that time agreed with the plaintiff: "In consideration of the plaintiff erecting said mills at said place that they would pay to the plaintiff an amount equal to one-half of the defendants' proportion of all freight charges for the hauling of all the necessary machinery, material and equipment for the erection and installation of the said mills." That "in consideration of the above" the plaintiff agreed to erect and did erect said mills.
The petition then sets out in detail the machinery and material shipped from various points in other states to Clinesburg, Texas, for that purpose, over the defendants' lines and other railroads, and the amount of freight charges paid to the defendants, one-half of which amount so received by the defendants was $ 4572.54. It then alleges demand of payment and refusal by defendants to pay; wherefore, plaintiff claimed damages in the sum of $ 4572.54.
After a general denial, the answer alleges that the contract sued on, if such there were, was illegal, void and unenforceable, and in violation of the Interstate Commerce Act.
The defendants objected to the introduction of any evidence on the ground that the petition failed to state a cause of action, demurred to the evidence at the close of plaintiff's evidence and again at the close of all the evidence; all of which objections and demurrers were overruled, and the cause was submitted to the jury.
There is little or no dispute as to the facts in the case. An agreed statement was introduced which covered all the formal requirements in making out the case as plaintiff conceived it, including the erection of lumber mills at Clinesburg; the interstate character of the shipments over the railways of the defendants of the materials and machinery that went into its construction; the amount of freight charges received by the defendants for such transportation, one-half of which was $ 4572.54. The stipulation then provides: "That during the entire time mentioned in the petition to this suit, said freight rates charged and paid by the plaintiff were the regular published tariff rates on said commodities, and that no new tariff, reducing the amount of the rate of said freight charges, was published during said time."
The Foster Lumber Company at the time had its headquarters at Houston, Texas, and owned large tracts of lumber lands located in San Jacinto County, Montgomery County, Harris County and Liberty County, the total amounting to over one hundred thousand acres. The plaintiff desired to erect mills at Clinesburg, which was situated on the line of defendants' railroad, in Montgomery County, within convenient distance of the several tracts. Before beginning the erection of the mills Mr. Womack, assistant manager, and Mr. Foster, vice-president, of plaintiff, had two or three conversations with Mr. Hershey, general freight agent, and Mr. Coleman, industrial agent, representing the defendants. The plaintiff's representatives wanted to know what the defendants "could do for us in the way of concession or donation;" and put forward the advantages which the plan would be to the road. It would cost approximately five hundred thousand dollars, a town of probably fifteen hundred people would grow up at the point where it would be erected and the defendants would be furnished about a hundred and twenty-five carloads of lumber per month for transportation. Defendants' representatives then suggested that they would give, in consideration of the erection of the mills, an amount equal to half of...
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