McFadden v. Alabama Great Southern R. Co.

• Decision Date: 26 April 1917
• Docket Number: 2138.
• Citation: 241 F. 562
• Parties: McFADDEN et al. v. ALABAMA GREAT SOUTHERN R. CO.
• Court: U.S. Court of Appeals — Third Circuit

241 F. 562

McFADDEN et al. v. ALABAMA GREAT SOUTHERN R. CO.

No. 2138.

United States Court of Appeals, Third Circuit.

April 26, 1917

John G Johnson and James Wilson Bayard, both of Philadelphia, Pa for plaintiffs in error.

Allen S. Olmsted, 2d, and Robert D. Jenks, both of Philadelphia Pa., for defendant in error.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

WOOLLEY Circuit Judge.

The main question in this case is whether the aggregate of two rates, one intrastate for a part of a given transportation and the other interstate for the rest of it, is the legal rate for interstate shipments, when there is at the same time a duly established interstate through rate for the same transportation. The question had its rise doubtless in the fact that the two first named rates when combined were less in amount than the one through rate.

A full statement of the case appears in the opinion of the District Court. 232 F. 1000. The pertinent facts briefly stated are these: The defendants are large cotton brokers operating in the State of Alabama. They purchased uncompressed cotton at various points in Alabama, shipped it to Birmingham where it was compressed and then transhipped it to points beyond the State. As typical of their transactions the defendants shipped quantities of cotton from Albertville, Alabama, by the Nashville, Chattanooga & St. Louis Railway Company, to Attalla, Alabama, a junction point, thence by the Alabama Great Southern Railroad Company (the plaintiff below) to Birmingham, Alabama, on through bills of lading to the last named point. At Birmingham the uncompressed cotton was unloaded, compressed by the carrier in accordance with a right reserved in tariffs filed and as a part of the transportation service rendered, and then re-loaded for continued shipment. At Birmingham the original bills of lading were surrendered and the shipments re-billed by the defendants to points beyond the State; but they were re-billed not from Birmingham but back from Attalla. This was done not to select a particular route but to obtain a particular rate. The rate paid by the defendants upon the demand of the plaintiff railroad company, acting for itself and its connecting lines, for the entire interstate shipment begun and completed under the two bills of lading, was the aggregate of two rates both legally established for the transportation to which they severally related. The first was a rate of the Nashville, Chattanooga & St. Louis Railway Company for intrastate transportation from Albertville to Attalla, Alabama, and was 11.7 cents per 100 pounds. This rate appears in the Intrastate Commodity Tariff filed by the carrier in conformity with the laws of Alabama. The other was an interstate rate of the plaintiff railroad company from Attalla to certain points beyond the State for cotton originating on the line of the Nashville, Chattanooga & St. Louis Railway Company, duly filed with the Interstate Commerce Commission, and was 32 cents per 100 pounds. That rate was preferable to the interstate rate from Birmingham, but to obtain it, interstate shipments of course had to begin at Attalla. So the defendants, in transhipping their cotton from Birmingham, where it was physically present, rebilled it back from Attalla, as though originating at and moving out of that place, deducting from the Attalla through rate of 32 cents the local rate already paid from Attalla to Birmingham. The two rates when added together amounted to 43.7 cents per 100 pounds, and this aggregate was the rate charged and paid for the interstate transportation from Albertville, the point of origin, to points of destination beyond the state.

Concurrently with these two tariffs there was in force a tariff of the Nashville, Chattanooga & St. Louis Railway Company, duly filed with the Interstate Commerce Commission, by which, under certificates of concurrence from the plaintiff railroad company and connecting lines, a fixed through rate for the same interstate shipment from Albertville to the same points of destination beyond the state was established at 57 cents per 100 pounds. This suit was brought to recover the difference between the rate paid and the rate established by the latter tariff, and in this way there arose the question--which tariff applies to the transportation.

In approaching this question we lay aside all considerations of conduct, intention, mistake and misunderstanding respecting the rate paid, for the law is very well settled that the Act to Regulate Commerce demands not only that the carrier shall charge but that the shipper shall pay the legal rate. The contract between carrier and shipper is no longer a contract as to rates; it is merely a contract that the carrier will render transportation service when the shipper pays the legal rate. When the transportation is interstate, the interstate rate is the legal rate, and that rate must be demanded and paid, for both the carrier and shipper are charged with notice of it; and if a lesser rate is charged and paid, intentionally or innocently, recovery must be had against the shipper for the difference, in order that the policy of the law against unjust discrimination may be carried out. L. & N.R.R. Co. v. Maxwell, 237 U.S. 94, 35 Sup.Ct. 494, 59 L.Ed. 853, L.R.A. 1915E, 665; Texas & Pacific v. Abilene Cotton Co., 204 U.S. 426, 27 Sup.Ct. 350, 51 L.Ed. 553, 9 Ann.Cas. 1075; Kansas City Southern v. Albers Commission Co., 223 U.S. 573, 32 Sup.Ct. 316, 56 L.Ed. 556; Central R.R. of New Jersey v. Mauser, 241 Pa. 603, 607, 608, 88 A. 791, 49 L.R.A. (N.S.) 92.

In determining the question of law-- which of the two rates is the legal rate applicable to the transportation service rendered-- we must first determine as a matter of fact the character of the transportation. If it was partially intrastate, then certainly the combined intrastate and interstate rates paid was the legal rate. If it was wholly interstate, then there remains the question whether a rate partly intrastate can lawfully be charged for transportation wholly interstate.

Whether commerce is interstate or intrastate must be determined by its essential character and not by mere billing or forms of contract. Chicago, Milwaukee & St. Paul Ry. Co. v. State of Iowa, 233 U.S. 334, 34 Sup.Ct. 592, 58 L.Ed. 988; Ohio R.R. Commission v. Worthington, 225 U.S. 101, 32 Sup.Ct. 653, 56 L.Ed. 1004; Texas & N.O.R.R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 Sup.Ct. 229, 57 L.Ed. 442; R.R. Commission of Louisiana v. Texas & Pacific Ry. Co., 229 U.S. 336, 33 Sup.Ct. 837, 57 L.Ed. 1215. Goods actually destined for points beyond the state of origin are necessarily in interstate commerce when they are delivered to the carrier and start in the course of transportation to another state. Coe v. Errol, 116 U.S. 517, 6 Sup.Ct. 475, 29 L.Ed. 715. This is true whether the goods are shipped on through bills of lading or on initial bills only to a terminal within the same state, where they are transhipped and thereafter transported on new bills of lading to a destination beyond the state. Southern Pacific Terminal Co. v. Interstate Commerce Commission and Young, 219 U.S. 498, 527, 31 Sup.Ct. 279, 55 L.Ed. 310; Texas & New Orleans R.R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 Sup.Ct. 229, 57 L.Ed. 442; Ohio R.R. Commission v. Worthington, 225 U.S. 101, 32 Sup.Ct. 652, 56 L.Ed. 1004.

Applying these well established principles to the facts of this case it appears in the instance we have cited as illustrative of all shipments in issue, that the cotton was shipped upon an intrastate rate to Birmingham, where it remained in the possession and control of the carrier, subject to be divested by the defendants availing themselves of a provision in the bills of lading directing delivery to their order. This the defendants might have done but never did. Therefore, we are to determine the character of the transportation by what was intended and by what was done with the commodity transported rather than by what might have been done with it. What the defendants did was not to call for delivery and acquire possession according to their right under the bills of lading, but to leave the cotton with the carrier for compression, (a right reserved by it and manifestly to be employed only when cotton was intended to be carried further,) and to direct its transportation by new bills of lading to points beyond the State. The concentration of cotton at the railroad's presses at Birmingham with the consequent interruption of the journey, was not a circumstance determining that the transportation ended at Birmingham and that therefore it was intrastate in character, but rather indicated the contrary, that compression to reduced bulk, being a thing desired and a right reserved when transportation was intended to be continued, the stop at Birmingham was not the end of a...