Gulf Compress Co. v. Harris, Cortner & Co.

• Decision Date: 30 June 1908
• Parties: GULF COMPRESS CO. v. HARRIS, CORTNER & CO.
• Court: Alabama Supreme Court

48 So. 477

158 Ala. 343

GULF COMPRESS CO. v. HARRIS, CORTNER & CO.

Supreme Court of Alabama

June 30, 1908

Rehearing Denied Feb. 5, 1909.

Appeal from Chancery Court, Morgan County; W. H. Simpson Chancellor.

Suit by Harris, Cortner & Co. against the Gulf Compress Company. From a decree overruling a motion to dismiss the bill for want of equity, a demurrer to the bill, and a motion to dissolve a preliminary injunction, defendant appeals. Reversed and rendered.

McClellan J., dissenting.

Brown &amp Kyle, Fittshugh, Biggs & Fittshugh, and Cabaniss & Bowie, for appellant.

E. W. Godbey and Callahan & Harris, for appellees.

DOWDELL J.

The appeal in this case is prosecuted from an interlocutory decree of the chancellor overruling the respondent's motion to dismiss the bill for want of equity, demurrer to the bill, and motion to dissolve the preliminary injunction for want of equity in the bill, and on the denials in the sworn answer of the material allegations of the bill.

The averments of the bill, in substance, are that the complainants, appellees here, are engaged in the business of buying, selling, and shipping cotton, and have been so engaged for more than a year, with their head quarters at Decatur, Ala., handling in their said business from 20,000 to 25,000 bales of cotton per annum, and will probably handle and deal in as many as 25,000 bales the current season; that they have a number of employés engaged in their service in the conduct of their business at a large expense to complainants; that the defendant, the Gulf Compress Company, is an Alabama corporation, with charter powers authorizing it to engage in the general storage and compress business; that the Gulf Compress Company in 1904 leased the plant of the Decatur Compress Company, an Alabama corporation of like powers, for a term of five years, at an annual cost to it of $10,000 to be paid as rent; that said plant has been conducted prior to said lease by the Decatur Compress Company, and since by the Gulf Compress Company under said lease, as a public warehouse and compress for hire and compensation, inviting dealers such as complainants, and the public, to store their cotton; that said cotton compress and warehouse is located in the city of Decatur and on lines of railway which furnish shipping facilities in the handling of cotton, and the complainants are dependent upon the defendant's warehouse and compress and facilities "for the proper conduct of their [complainants'] business"; that in the lease contract under which the Gulf Compress Company operates said plant, a schedule of maximum charges was fixed by the contracting parties during the terms of the lease, and that until recently the Gulf Company has been conforming to the schedule so fixed, but since the close of the cotton season of 1906-7, the respondents, the Gulf Company and the Decatur Company, have annulled said lease, at least in so far as it relates to the schedule of maximum charges, and that under the new arrangement there is no limitation upon the respondent the Gulf Company in fixing the amount it will charge for services in the conduct of its business; that a new schedule of rates was made by the Gulf Company for the cotton season of 1907-8, which in certain particulars specified increased the charges incident to its business as warehouseman, and that such increased charges are unreasonable; that the Gulf Company has refused to receive complainants' cotton and render the services which has been its custom to render under the old schedule, unless complainants will submit to and pay the charges fixed in the new schedule, which it is alleged will be "practically ruinous" to the complainants. It is averred that the plant operated and conducted by the Gulf Company is the only one of its kind maintained in the city of Decatur, or in the county, and that the Gulf Company has taken out a license as required of warehousemen by an act of the Legislature approved March 7, 1907 (see Gen. Laws passed at first session 1907, page 371, and which is incorporated in the Code of 1907, as section 6123 et seq.), and that by reason of being the only warehouse of its kind in said city or county it was a virtual monopoly. The lease contract between the Gulf Company and the Decatur Company, and under which the plant is being operated by the former company, is set out as Exhibit A to the bill. The old and new schedules of rates and charges are set out as Exhibits B and C to the bill. It is averred that the old rates had been maintained for three years, and that, in reliance upon a continuation of the old rates, the complainants during the summer months of 1907, and prior to the beginning of the cotton season of 1907-8, in making preparations for the conduct of their business in the handling of their cotton for said cotton season of 1907-8, incurred heavy liability in the employment of hands, etc., and this without any notice or knowledge of the proposed change in the schedule of rates and charges.

It will be observed from the foregoing statement that the alleged wrong complained of is based upon the increase in rates and charges prescribed in the new schedule over those in the old, and as being excessive and unreasonable. The bill is directed against the Gulf Compress Company as warehouseman, no complaint being made as to the compress feature of respondent's business. The relief sought is injunctive. There is no charge of discrimination against the complainants in favor of any other customer of the respondent, but all are put upon the same basis and with like treatment.

The bill, according to its averments and prayer for relief, is predicated upon the theory that the business of the respondent is "affected with a public interest" either by virtue of the act of March 7, 1907, declaring all warehouses in incorporated cities and towns for the storage of cotton or other articles of value for compensation to be public warehouses, or by reason of its being a monopoly in fact. However this may be, whether "affected with a public interest" or not, we need not decide that being unnecessary to a conclusion of the case under our view of the law applicable to the facts as shown by the bill, and therefore for the sake of argument it may be admitted that the business is one "affected with a public interest." But it is proper to here state that the respondent Gulf Compress Company is not in any sense a "public service" corporation, nor does the business carried on by it characterize it as such. It possesses no element of governmental power conferred upon it by law as in the case of a railroad company, serving the public as a common carrier of passengers and freight. It is strictly a private business corporation, organized for private gain and not for public service--a private business enterprise like that of an incorporated concern to carry on a merchandise business or a manufacturing business. And the fact that the statute declares that part of the plant conducted as a warehouse for the storage of cotton for compensation to be "a public warehouse" does not change the private nature and character of the corporation, or convert it into a "public service" concern, in the sense in which those terms are used and understood. The most that can be said of the effect of the statute is to say that it impresses upon the warehouse business the character of its being "affected with a public interest." It is well to observe in this connection that the act of March 7, 1907 does not prescribe any rates or charges for storage, or undertake in any manner to regulate the business conducted or carried on in such "public warehouses." There are privileges and powers possessed by "public service" corporations and exercised by them, governmental in character, which may not be conferred upon a private business corporation, as, for instance, the right of eminent domain, although the business carried on by the latter may become "affected with a public interest." This distinction has...