Gamble-Robinson Com'n Co. v. Chicago & N.W. Ry. Co.

• Decision Date: 22 March 1909
• Docket Number: 2,712.
• Citation: 168 F. 161
• Parties: GAMBLE-ROBINSON COMMISSION CO. v. CHICAGO & N.W. RY. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

168 F. 161

GAMBLE-ROBINSON COMMISSION CO. v. CHICAGO & N.W. RY. CO.

No. 2,712.

United States Court of Appeals, Eighth Circuit.

March 22, 1909

(Syllabus by the Court.)

An interstate carrier does not subject a consignee to an undue or unreasonable prejudice or disadvantage under section 3 of the interstate commerce act (Act Feb. 4, 1887, c. 104, 24 Stat. 380 (U.S. Comp. St. 1901, p. 3155)) by exacting, after due notice to it, the prepayment of charges for transportation of all property consigned to it, while it does not require such charges to be paid in advance upon freight consigned to others similarly situated.

The interstate commerce act (Act Feb. 4, 1887, c. 104, 24 Stat 379 (U.S. Comp. St. 1901, p. 3154)) does not prohibit the giving of all preferences and advantages, or the production of all prejudices and disadvantages, but only those that are undue and unreasonable.

A common carrier has the right under the common law to demand the prepayment of charges for freight of one, and to give credit for them to another similarly situated.

An interstate common carrier is free to exercise all his rights under the common law to the full extent to which such exercise has not been made unlawful by the interstate commerce act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 (U.S Comp. St. 1901, p. 3154)).

The fact that a carrier, for the purpose of injuring the business of a consignee, or harassing it, subjects it to a prejudice or disadvantage which is neither undue nor unreasonable, does not change the nature of the prejudice or disadvantage or create any cause of action therefor.

The plaintiff is a corporation engaged in buying, selling, and dealing for commissions in fruit, vegetables, and dairy products at Minneapolis, and it has offices at St. Paul Rochester, and Mankato, in Minnesota, and Aberdeen in South Dakota. The defendant is a common carrier. It has railroad stations at those towns, and lines of railroad through those states and adjoining states. It is the custom and usage of such carriers, and of the defendant, for the terminal carrier to advance the charges of connecting lines upon freight consigned to parties at those stations, to transport the freight and deliver it to the consignees, also to receive freight at its stations and to transport and deliver it to the consignees, to hold the bills until the questions regarding the correctness of the charges on its lines and on the connecting lines have been adjusted, and then to collect the bills of the consignees. From a bad motive the defendant, after notice, refused to advance charges to connecting lines, to receive and transport freight consigned to the plaintiff, unless the charges upon it for transportation were prepaid, while it continued to give credit to other consignees similarly situated according to the usage and custom.

Held: These acts did not subject the plaintiff to undue or unreasonable prejudice or disadvantage within the meaning of the interstate commerce act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 (U.S. Comp. St. 1901, p. 3154)).

The alleged error in this case is that the court below sustained a demurrer to the plaintiff's complaint, and the material facts alleged therein were these: The plaintiff is a corporation engaged in buying and selling fruit, vegetables, farm and dairy products, and in a general commission business in these commodities at the city of Minneapolis, in the state of Minnesota, and it has branch offices at St. Paul, Rochester, and Mankato in that state, and at Aberdeen in South Dakota. The defendant is a railroad corporation and a common carrier. It has offices, agents, and agencies in St. Paul and Minneapolis. It owns and operates railroads in Iowa, Illinois, Minnesota, Dakota, and Wisconsin, and it has direct connections, by means of its own or other railroads, between its stations in those states and St. Paul, Minneapolis, Mankato, Rochester, and Aberdeen. Prior to December 15, 1906, it was the uniform custom and usage of railroad carriers, and of the defendant, to accept shipments of the products that have been named at local stations without the prepayment of freight, to take from the shipper a written guaranty of such payment, to deliver the products to the consignees in the cities named, and afterwards to collect of these consignees the charges for transportation, 'and in case of any question arising as to the correctness of any transportation charge upon the line of the terminal or any connecting carrier, such terminal carrier takes the matter up for adjustment and holds the freight bills until an adjustment is made. ' In case shipments of these products were received by carriers from connecting lines, the custom and usage was for the terminal carrier to pay the charges of the connecting lines and to collect for the entire transportation from the consignees at destination after it had delivered the goods to them. These customs and usages prevailed in transactions between common carriers and all reputable and responsible business houses, and the plaintiff was one of that character. The plaintiff had built up a commission business, a large part of which can be conducted only by the use of the defendant's railroad, and the charges for transportation which it paid to the defendant amounted to several thousand dollars a month. On December 15, 1906, the defendant notified its agents and connections that it would not thereafter accept freight consigned to the defendant, either from shippers or from connecting lines, unless the transportation charges thereon were prepaid, and it has since refused to accept such freight without prepayment. At the same time it has continued to receive for and to deliver freight to the competitors of the plaintiff who are similarly situated without the prepayment of transportation charges. This course of action was adopted by the defendant to harass the plaintiff, to injure its business and its credit, to give its competitors an unequal and unreasonable preference and advantage, and to subject it to an unequal and unreasonable prejudice in the transaction of its business, and it has that effect. It has impaired the plaintiff's credit and its financial responsibility and caused it considerable loss of business, and for these damages it demands a judgment of $50,000.

Walter Holsinger, for plaintiff in error.

L. L. Brown (W. D. Abbott and S. H. Somsen, on the brief), for defendant in error.

Before SANBORN and HOOK, Circuit Judges, and PHILIPS, District Judge.

SANBORN Circuit Judge (after stating the facts as above).

Section 3 of the act of February 4, 1887, commonly called the 'Interstate Commerce Act,' provides:

'That it shall be unlawful for any common carrier subject to the provisions of this act, to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation or locality, or any particular description of traffic in any respect whatsoever, or to subject any particular person, company, firm, corporation or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.' 24 Stat. 380, c. 104 (3 U.S.Comp.St. 1901, p. 3155).

Is it a violation of this section for a common carrier which customarily delivers to consignees a certain class of freight, holds the freight bills until after any question arising concerning the correctness of any transportation charges upon its line and upon connecting lines over which the freight has been transported has been adjusted, and then collects them, to refuse to grant such a credit to a particular consignee and to require prepayment of freight bills by it while it still continues to extend credit to others similarly situated? In other words, is it a violation of this section for a railroad company to refuse to loan to one consignee without interest the moneys owing to it for transportation charges earned by it and for those paid by it to connecting lines until the consignee's claims that such charges are incorrect have been settled, when it customarily makes such loans to other consignees? This is the question which this case presents, and it is well to perceive clearly the nature of the controversy inherent in it and the amount actually involved before entering upon the discussion of the issue it presents.

The plaintiff is a commission company dealing in perishable products, such as fruit, vegetables, farm and dairy products, claims for errors in the transportation charges upon which and for damages from the transportation of which frequently arise and are met with great difficulty after the products have been delivered. The plaintiff alleges that it is the custom of the terminal carriers to advance the transportation charges upon such products to connecting lines, to deliver the products to the consignees, 'and afterwards to collect the reasonable and proper charges for transportation, and, in case of any question arising as to correctness of any transportation charge upon the line of the terminal or any connecting carrier, such terminal carrier takes the matter up for adjustment and holds the freight bills until an adjustment is made,' and that the defendant has refused to follow this custom and has demanded of it prepayment of the transportation charges on the freight consigned to it, and has refused to accept the freight without such prepayment, although it follows the custom in the treatment of its competitors similarly situated. It further alleges that the sum paid by it to the defendant for its transportation charges and those of connecting lines has amounted to several thousand dollars per month.

A liberal interpretation of several thousand in this pleading is three thousand, and the complaint fails to show that the...