Kansas City Southern Railway Company v. Albers Commission Company

Citation223 U.S. 573,32 S.Ct. 316,56 L.Ed. 556
Decision Date26 February 1912
Docket NumberNo. 18,18
CourtUnited States Supreme Court

Messrs. Cyrus Crane and Samuel W. Moore for plaintiff in error.

[Argument of Counsel from pages 574-577 intentionally omitted] Messrs. John M. Wayde, Philip P. Campbell, and Carl O. Pingry for defendant in error.

[Argument of Counsel from pages 577-584 intentionally omitted]

Page 584

Mr. Justice Van Devanter delivered the opinion of the court:

This was a proceeding in garnishment under the laws of the state of Kansas. The C. H. Albers Commission Company had recovered a judgment in the district court of Crawford county, in that state, against Robert L. Forrester and Joseph M. Forrester, doing business as Forrester Brothers, in the sum of $10,333.72, with interest, and had brought the Kansas City Southern Railway Company into the case, as a garnishee, upon a general allegation that it was indebted to Forrester Brothers. The railway company, which will be spoken of as the garnishee, appeared and denied that allegation. Under the practice in that state the issue so framed was, without other pleadings, brought on for trial as a civil action. The trial was begun before the court and a jury, but later the jury was discharged, with the consent of the parties, and the trial proceeded before the court alone. The case made by the evidence was this:

The garnishee was operating a railroad extending from Kansas City, Missouri, to Texarkana, Texas. Another railroad, which will be spoken of as the northern line, connected with it at Kansas City and extended northward to Omaha, Nebraska. Forrester Brothers were buyers and sellers of grain, with offices at St. Louis, Missouri. In the late summer or early fall of 1901 the two roads, at the solicitation of Forrester Brothers, entered into an oral agreement with the latter whereby they were granted a special rate on corn and oats to be shipped in carload lots from Omaha via Kansas City to Texarkana. The evidence was conflicting as to whether the rate agreed upon for the through haul was 12 1/2 or 16 1/2 cents per hundred pounds, but it was one or the other, and the garnishee was to charge and receive 8 cents for the haul over its road, and the remainder was to go to the northern line. The evidence

Page 585

was also conflicting as to whether the agreement was to terminate on the 31st of October, or was to continue until all the shipments then contemplated by Forrester Brothers were completed. After the agreement was made, and in reliance thereon, Forrester Brothers made large purchases of corn and oats at Omaha for shipment to and sale at Texarkana, as they had contemplated doing when soliciting the special rate. The agreement was observed by the garnishee until and including the 31st of October, and during that time the shipments were carried on through bills of lading. Thereafter the garnishee disregarded the agreement, required that the shipments be rebilled at Kansas City, and collected a 10-cent rate for the haul over its road until November 10, and thereafter a 14-cent rate. The payment of the larger rates was made by an agent of Forrester Brothers at Kansas City, who did not know of the agreement. By exacting the larger rates the garnishee received $10,527.55 more than it would have received under the 8-cent rate. No schedule embodying the 12 1/2 or 16 1/2-cent rate, whichever it was, for the through haul, or the 8-cent rate for the haul over the garnishee's road, was filed with the Interstate Commerce Commission; and neither was any memorandum or statement of the oral agreement so filed. Apart from the agreement there was no joint through rate applicable to these shipments.

When the agreement was made there was in force on the garnishee's road a 'proportional rate' of 10 cents per hundred pounds on corn and oats moving from Kansas City to Texarkana. This rate was not applicable to shipments originating at Kansas City, but only to such as originated elsewhere on connecting lines. Nor was it invariably confined to the movement from Kansas City to Texarkana, for it included also the haul, when there was such, to Kansas City from certain common points, such as St. Joseph, Atchison, and Leavenworth, which usually

Page 586

enjoyed the Kansas City rates, and were not reached by the garnishee's road, but by other roads. Thus, shipments originating on lines connecting at the common points with the roads leading to Kansas City took this rate from the common points to Texarkana. As applied to such shipments the rate was joint as well as proportional, and as applied to others it was a proportional rate of the garnishee alone. It was embodied in a schedule duly filed with the Interstate Commerce Commission, and remained in force until November 10, when it was superseded by a like rate of 14 cents, shown in an amendatory schedule so filed. These schedules bore a heading indicating that they were adopted by the garnishee 'in connection with' other designated railroads, they being the roads over which the haul, when there was such, from the common points to the garnishee's road, would be made. The northern line was not one of them, nor was Omaha one of the common points. There was a like provision for the haul, when there was such, from Texarkana to common points therewith, and also a designation of the railroads over which that haul would be made; but as that feature of the schedules is immaterial here, it may be eliminated from consideration.

As explaining a proportional rate and indicating the correct application of the one just named, F. M. King, an experienced station agent of the garnishee, testified:

Q. I will ask if you know whether or not the words 'proportional rates,' have a well-defined and understood meaning in railroad business and on the Kansas City Southern.

A. They have; yes, sir.

Q. Now, just tell briefly what those terms mean, those words 'proportional rates,' if you know.

A. A proportional rate is a rate put in to cover business . . . coming to our lines from other points, applying to commodities where we have no through rates. It is put in in order to protect a shipper on a long haul. For instance, a shipment coming from . . . points

Page 587

out of Kansas, where there is no through rate published, . . . we accept it from the connecting line and bill it out then on a proportional rate, which is less than the local tariff rate.

Q. Now, you spoke there of a local tariff rate; if those words have a well-defined meaning, I wish you would state what those are.

A. A local rate is a rate applying locally from one station to another on the same road.

Q. In that term 'local rate,' as distinguished from 'proportional rate,' how about the origin of the shipment?

A. That is where it originates and terminates on the same line.

And E. E. Smythe, the general freight agent of the garnishee, under whose direction the schedules embracing this proportional rate were prepared and filed, testified:

Q. Mr. Smythe, what is meant in railroading by 'common points?'

A. Common points are points which take the same rate. . . .

Q. Common points are comparatively close together, taking the same rates?

A. Yes, sir.

Q. How far north is Omaha from Kansas City?

A. 220 or 226 miles. . . .

Q. How far north from Kansas City is Atchison and Leavenworth?

A. Between 30 and 40 miles.

Q. And St. Joe about 60 miles north of Kansas City?

A. Yes, sir, 60.

Q. Is Omaha a common point with Leavenworth, Atchison, St. Joe, and Kansas City?

A. No, sir. . . .

Q. Now, Mr. Smythe, I will ask you to state what is known in railroading as 'proportional rates,' what does that expression mean, if it has any fixed or definite meaning?

Page 587-Continued.

A. Proportional rates are rates established in a great many centers—grain centers, if you please—on grain coming from any territory which may be shipped there for reshipment. . . .

Q. I will ask you if the words 'proportional rates' have a fixed and definite meaning among railroad men, especially among traffic men?

A. Yes, sir. . . .

Q. Can you give us an illustration, so we will understand it more definitely? Give your own illustration of shipments coming into Kansas City and

Page 588

going out again.

A. We will take Wichita, Kansas. Some Kansas City firm will buy hay and grain there from a Wichita dealer, or some point in that territory, and ship that hay to Kansas City to John Jones Commission Company. Mr. Jones pays the freight on that car, and in the meantime . . . he may have sold that car of hay or grain to go to New Orleans, . . . and he accordingly comes to you, or presents to the general agent the expense bill covering the freight in, and when that is checked to see that the correct rate is applied, it goes out on a proportional rate from Kansas City or any other point where the proportional rate applies, at the proportional rate named in the tariff. . . .

Q. Explain in your own way.

A. You want me to explain what that tariff [the proportional one now under consideration] means? What it would apply on?

Q. Yes, sir, just explain the meaning of this expression 'in connection with the Chicago Great Western' and the other roads.

A. That tariff would apply on grain coming into Kansas City on any railroad in America [and bound] to Texarkana. . . .

Q. You say it would apply on grain coming into Kansas City from any point in the world? Yes, sir, any place in America.

This testimony, bearing upon the meaning of the proportional rate schedules, was not in any way contradicted.

It was not shown whether those schedules were sanctioned by the other railroads over which the haul, when there was such, from the common points to the garnishee's road, was to be made; and while it was shown that those schedules were regularly printed, and that copies thereof were sent to the freight offices of the garnishee at Kansas City and other points, and were...

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