Merchants Warehouse Co v. United States Merchants Warehouse Co v. United States United States v. Merchants Warehouse Co Pennsylvania Warehousing Safe Deposit Co v. United States Pennsylvania Warehousing Safe Deposit Co v. United States United States v. Pennsylvania Warehousing Safe Deposit Co Philadelphia Warehousing Cold Storage Co v. United States Philadelphia Warehousing Cold Storage Co v. United States United States v. Philadelphia Warehousing Cold Storage Co

• Decision Date: 18 May 1931
• Docket Number: Nos. 635-643,s. 635-643
• Citation: 75 L.Ed. 1227,51 S.Ct. 505,283 U.S. 501
• Parties: MERCHANTS' WAREHOUSE CO. v. UNITED STATES et al. MERCHANTS' WAREHOUSE CO. et al. v. UNITED STATES et al. UNITED STATES et al. v. MERCHANTS' WAREHOUSE CO. et al. PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO. v. UNITED STATES et al. PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO. et al. v. UNITED STATES et al. UNITED STATES et al. v. PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO. et al. PHILADELPHIA WAREHOUSING & COLD STORAGE CO. v. UNITED STATES et al. PHILADELPHIA WAREHOUSING & COLD STORAGE CO. et al. v. UNITED STATES et al. UNITED STATES et al. v. PHILADELPHIA WAREHOUSING & COLD STORAGE CO. et al
• Court: U.S. Supreme Court

283 U.S. 501

51 S.Ct. 505

75 L.Ed. 1227

MERCHANTS' WAREHOUSE CO.

v UNITED STATES et al.

MERCHANTS' WAREHOUSE CO. et al.

v. UNITED STATES et al.

UNITED STATES et al.

v. MERCHANTS' WAREHOUSE CO. et al.

PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO.

v. UNITED STATES et al.

PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO. et al.

v. UNITED STATES et al.

UNITED STATES et al.

v. PENNSYLVANIA WAREHOUSING & SAFE DEPOSIT CO. et al.

PHILADELPHIA WAREHOUSING & COLD STORAGE CO.

v. UNITED STATES et al.

PHILADELPHIA WAREHOUSING & COLD STORAGE CO. et al.

v. UNITED STATES et al.

UNITED STATES et al.

v. PHILADELPHIA WAREHOUSING & COLD STORAGE CO. et al.

Nos. 635-643.

Argued April 21, 1931.

Decided May 18, 1931.

[Syllabus from pages 501-503 intentionally omitted] Messrs. John W. Davis, of New York City, and M. Hampton Todd, of Philadelphia, Pa., for Merchants' Warehouse Co. and others.

Mr. H. Edgar Barnes, of Philadelphia, Pa., for Pennsylvania Warehousing & Safe Deposit Co.

Mr. John P. Connelly, of Philadelphia, Pa., for Philadelphia Warehousing & Cold Storage Co.

Mr. J. Stanley Payne, of Washington, D. C., for the United States and Interstate Commerce Commission.

Mr. John J. Hickey, of Washington, D. C., for James Gallagher and others.

Mr. Justice STONE delivered the opinion of the Court.

These are appeals under section 238 of the Judicial Code (28 USCA § 345), from a decree of a District Court of three judges for Eastern Pennsylvania, dismissing the bills of complaint by which appellants, warehousing corporations doing business in Philadelphia, sought to set aside an order of the Interstate Commerce Commission. 44 F.(2d) 379. The order required the Reading Company and the Pennsylvania and Baltimore & Ohio railroads, interstate rail carriers, to cancel such provisons in their tariffs as pur- ported to make the warehouses of appellants in Philadelphia a part of the station facilities of the carriers. and directed that they cease and desist from making allowances to appellants in connection with the loading and unloading of package freight at the latter's warehouses. There are also cross-appeals from an order of the District Court staying the order of the Commission pending disposition of the appeals in this court.

The three railroads load and unload package freight at their stations in Philadelphia. The Pennsylvania and Baltimore & Ohio railroads have designated some of appellants' warehouses as parts of their station facilities there. All three have contracts of long standing with one or more appellants, under which the latter, at their warehouses, afford facilities and perform services, in connection with the loading and unloading of package freight, which they denominate terminal facilities and services, and for which the railroads pay them a stipulated compensation. In the case of the Pennsylvania, provision is made for this allowance in its published tariff.

Six warehouse companies, appellees, which also maintain warehouses in Philadelphia with private railroad sidings connected with one or another of the three railroads, and are competitors of appellants, instituted proceedings before the Interstate Commerce Commission, in which they assailed the terminal service contracts referred to as unjustly discriminatory and unduly preferential, and the payments made under them as unlawful rebates. Numerous merchants' organizations of Philadelphia intervened in the proceedings, which were consolidated and heard as a single cause, and resulted in the order before us. 160 I. C. C. 563.

The Interstate Commerce Commission and the court below found the facts as already stated and also the following: Carload freight, carried at carload rates, is customarily loaded and unloaded by the owner or consignee, as required by rule 27 of the Consolidated Freight Classi- fication, filed under section 6 of the Interstate Commerce Act (49 USCA § 6), with the binding force of a tariff schedule. By exceptions to the classification, the railroads undertake, as a part of the transportation service covered by their tariffs, to load and unload carload package freight at their Philadelphia freight stations, except when handled directly to or from cars on team tracks. At their warehouses appellants load and unload cars and perform other services presently to be referred to, for which the railroads compensate them by the challenged allowances. These services do not differ in substance from those which the competing warehouses render. Both handle the same classes of freight and procure its shipment to or from them by advertising in trade publications and in circulars to prospective customers. Shippers using public warehouse facilities generally select the company offering the lowest aggregate charge for the distribution of their goods, and, by reason of the allowances made, the contract warehouses are able to quote lower prices than their competitors, thus securing business which would otherwise go to the latter. The primary motive for the payment of the allowances to the contract warehouses is to gain traffic, and the allowances are compensation to appellants for their solicitation of freight movements over the lines of the carriers.

The Commission and court also found as follows: Appellants' warehouses, while nominally open to the general public as railroad freight stations, are not in fact public stations, but are confined to the warehousing of merchandise for their patrons. The services which they perform in connection with loading and unloading of freight, including the sending of arrival notices to their patrons after receipt of notice of arrival from the railroad, the collection of freight charges, and other incidental matters, are in fact performed for the owners of the merchandise rather than for the railroads. While the contract warehouses are not owners of goods received or shipped, the dealings of the railroads are with them and not with the owners of the goods; and as to many of the inbound carload shipments, the contract warehouses are the only parties to whom delivery of the goods could be made as carload shipments, the real owners being concerns which ship carload merchandise to appellants for distribution by them in less than carload lots. The contract warehouses, being given dominion over the merchandise for transportation purposes, are to be deemed consignors of shipments from, and consignees of shipments to, their warehouses.

Appellants do not seriously contend that the challenged allowances are not discriminatory in fact, but maintain that the discrimination is one which the law permits. While conceding that the contract warehouses and their patrons, by virtue of the contracts and allowances, gain important business advantages over their competitors, they insist that the advantages are those which flow exclusively from the fact that the contract warehousemen are agents of the carriers in the performance of transportation services, and that since the railroads may properly perform such services at their own stations and include charges for them in their filed tariffs, they may likewise select the warehouses of appellants as stations, perform the services there, and employ and compensate the warehousemen for doing them. As these contentions do not comport with the findings of the Commission and the court below that the contract warehouses are not in fact open public freight stations, and that the services rendered are not transportation services, those findings are sharply challenged as without support in the evidence.

We may assume that the railroads, in order to carry on their business as interstate carriers, are not bound to maintain their own freight stations, but may contract with others to supply them and to perform there the transportation services which they are under a duty to perform. Arbuckle Case (United States v. Baltimore & Ohio R. R.) 231 U. S. 274, 34 S. Ct. 75, 58 L. Ed. 218. If appellants' warehouses were held out to the public by the carriers, and used exclusively, as freight stations, and the services rendered there were exclusively transportatin services which the carriers were either bound or permitted to render, the case would lack those elements which appellees urge as challenging the right of the carriers to make the allowances of appellants. They say that the warehouses of appellants are devoted to their private business activities in the storage, distribution, and assembling of freight for their patrons before or after its rail transportation, and that the alleged transportation services are but a part of these activities, not differing from those performed by other warehouses for their patrons as a part of their warehousing business. Appellees contend that the designation of them as transportation services, only when performed at warehouses of appellants, enables the carriers to discriminate in favor of appellants, at the expense of their competitors, by compensating for them in that guise, or, what is the same thing, by extending to appellants at their warehouses the benefit of transportation services withheld from their competitors.

We think, as the court below held, that the Commission's finding that appellants' warehouses are not in fact public freight stations, is supported by the evidence. As already indicated, they are owned or controlled by appellants and used by them as storage and distribution warehouses located on private premises, served by private side tracks. They are not leased to the railroads. There is no provision in the contracts between the carriers and the warehousemen which suggests that the warehouses were regarded or intended to be treated by either as freight stations. There was evidence that, apart from the designation of the warehouses as stations in the tariffs, they were neither held out nor treated as such by carriers or appellants, nor known as such generall to shippers or to representative trucking companies engaged in the business of handling freight in...