Minneapolis, St. P. & S. S. M. Ry. Co. v. Menasha Wooden Ware Co.

• Decision Date: 08 January 1915
• Citation: 159 Wis. 130,150 N.W. 411
• Court: Wisconsin Supreme Court
• Parties: MINNEAPOLIS, ST. P. & S. S. M. RY. CO. v. MENASHA WOODEN WARE CO.

159 Wis. 130

150 N.W. 411

MINNEAPOLIS, ST. P. & S. S. M. RY. CO.

v.MENASHA WOODEN WARE CO.

Supreme Court of Wisconsin.

Dec. 8, 1914.

Dissenting Opinion, Jan. 8, 1915.

Appeal from Circuit Court, Winnebago County; George W. Burnell, Judge.

Action by the Minneapolis, St. Paul & Sault Ste. Marie Railway Company against the Menasha Wooden Ware Company. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with directions.

Action to recover the tariff freight charges on car load shipments of logs and wood bolts from various points in the state to Ladysmith, carried over plaintiff's road between June 1, 1911, and March 1, 1912. So far as affecting any question decided upon the appeal the facts are these:

On December 15, 1899, the parties entered into a contract in the form of an offer and acceptance which read:

“That in consideration of your making us a rate of 3c. per hundred pounds, minimum of 30,000 pounds on staves and heading from Warner to Prentice and $3 per car on logs and bolts from McCord to Warner, and the same rate west of Warner as far as McCord is east of Warner on logs and bolts, with the understanding that the freight on lumber to general markets from Warner will not average any higher than that from Chippewa Falls, and that any of our pine timber that we have between Gagen and Rhinelander you will be willing to haul to either Prentice or Pembine at $1 per thousand. Minimum on logs 5,000 feet per car and on bolts 12 cords per car: We propose to put in a mill as soon as it can be done in the spring at Warner. This, of course, is with the understanding that you will put in the necessary sidings for our mill at Warner and sidings where we desire to make shipments of logs and bolts where shipments would warrant, the understanding being that we furnish the right of way, grading, and ties. The above rates are to hold good as long as we own and operate the mill at Warner.”

Warner is now called Ladysmith, and McCord is about 60 miles east of Ladysmith. The rate named in the contract was observed by the parties until June 1, 1911, except that from 1907 defendant paid $4 per car, because of the increased size of cars in common use. This modification was consented to by both parties as a proper construction of the contract. February 27, 1911, the plaintiff sent notice to defendant that tariffs covering the shipments in question would be filed with the Wisconsin Railroad Commission and freight charged pursuant to the tariffs and not under the contract. Subsequently tariffs were filed with the Wisconsin Railroad Commission covering the period between June 1, 1911, and March 1, 1912. These tariffs placed all Wisconsin shippers on the same basis, and exceeded the contract price, but provided for only a reasonable rate.

Plaintiff claims the contract was superseded by the Wisconsin Railroad Commission Law and by the tariffs filed pursuant thereto. The defendant claims the contract is still in force and controls the price that it should pay. The circuit court held that the contract was still in force and governed the freight rate, and it entered a judgment in favor of plaintiff for the freight due under the contract, to wit, $113.09, instead of for the sum of $3,217.04, due under the tariffs, and enjoined plaintiff from refusing to haul under the contract rate. From such judgment the plaintiff appealed.

Marshall, J., dissenting.

Kenneth Taylor, of Minneapolis, Minn., and Silas Bullard, of Menasha (W. A. Hayes, of Milwaukee, and Alfred H. Bright, of Minneapolis, Minn., of counsel), for appellant.

Thompson, Thompson & Jackson, of Oshkosh, for respondent.

VINJE, J. (after stating the facts as above).

[1] That it was the avowed purpose of chapter 362, Laws of 1905 (sections 1797--1 to 1797--36, Stats.), and the acts amendatory thereof, known as the Wisconsin Railroad Commission Act, to secure nondiscriminating, just, and reasonable rates for all services rendered by railroads as common carriers of persons and property within the state, is so plain from the language of the act as not to admit of serious doubt. Section 1797--3 provides:

“Every railroad is hereby required to furnish reasonably adequate service and facilities, and the charges made for any service rendered or to be rendered in the transportation of passengers or property or for any service in connection therewith, or for the receiving, switching, delivering, storing or handling of such property, shall be reasonable and just, and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful.”

Section 1797--23 declares any undue or unreasonable preference or advantage or disadvantage to any person, firm, or corporation unlawful, and prohibits the same; and section 1797--24 penalizes rebates, concessions, or discriminations in respect to the transportation of any property within the state. Treble damages are provided for in behalf of the person, firm, or corporation injured thereby, in addition to the penalty accruing to the state. Section 1797--25. These provisions, taken in connection with the whole scheme of the act, unmistakably point to the conclusion that railroad rates within the state should after the act took effect be reasonable, nondiscriminating, and apply to all shippers alike within the territory and for the commodity covered by the tariff rates.

[2] The question therefore arises whether or not the contract between the parties was superseded by the Railroad Commission Act and the filing of tariffs affecting the freight in question in accordance with the provisions of such act. The defendant claims that its contract was in no wise affected by the enactment of the act and the filing by plaintiff of tariffs thereunder, because the contract, being valid when made, could not by reason of the provisions of the federal and state Constitutions prohibiting the passage of any law impairing the obligations of contracts, be invalidated by any legislative act. And it relies especially upon the case of Superior v. Douglas County Telephone Co., 141 Wis. 363, 122 N. W. 1023, as being decisive of the correctness of the position taken. It further claims that in any event section 1797--6 saves the contract, because that section in its terms saves transit and special contract rates.

Does the Railroad Commission Act, irrespective of section 1797--6, and the filing of tariffs thereunder covering the transportation provided for in the contract, supersede it? That it would be superseded, except for the constitutional provisions above referred to, is quite plain. The act provided that the lowest schedule of rates in force in April, 1905, should constitute the lawful schedule of rates until changed by the filing of other tariffs. Section 1797--35. Section 1797--4 makes it the duty of every railroad to file with the Commission a full schedule of rates in force for all services rendered by it within the state. And subdivision (c) thereof declared that:

“It shall be unlawful for any railroad to charge, demand, collect or receive a greater or less compensation for the transportation of passengers or property or for any service in connection therewith than is specified in such printed schedules, including schedules of joint rates, as may at the time be in force, and the rates, fares and charges named therein shall be the lawful rates, fares and charges until the same are changed as herein provided.”

So it is plain, as stated in Frank A. Graham Ice Co. v. Chicago, M. & St. P. Ry. Co., 153 Wis. 145, 140 N. W. 1097, that the Legislature intended to and did provide for an exclusive method of fixing freight rates, in so far as it could constitutionally do so.

[3] The contract relied upon by the defendant was entered into pursuant to the provisions of subdivision 9 of section 1828, Stats. 1898, which gave the railroad company the right to regulate the compensation to be paid for transporting passengers and property, and it is conceded by plaintiff that it was valid when made. The corporate power thus granted to the plaintiff to regulate the compensation to be paid for its services was granted subject to the right of the state to amend or annul it. There was no absolute irrevocable grant of power to the railroad company to forever regulate rates, but only a grant of power to be exercised by it until modified, amended, or resumed by the state. The power to regulate the rates of common carriers is a sovereign power of the state. Milwaukee E. R. & L. Co. v. Railroad Commission, 153 Wis. 592, 142 N. W. 491. And very contract made as to such rates with a corporation authorized to contract in reference thereto is made with the knowledge of and subject to the right of the state at any time to resume the exercise of such sovereign power. The legislative right to supersede it is as clear as though it were written into the contract itself, for the law implies it. This was expressly held in Milwaukee E. R. & L. Co. v. Railroad Commission, 153 Wis. 592, 142 N. W. 491, and as there stated was involved in the decision in Manitowoc v. Manitowoc & Northern T. Co., 145 Wis. 13, 129 N. W. 925, 140 Am. St. Rep. 1056, only in the latter case it was held the state had not exercised its power to act. To construe subdivision 9 of section 1828, R. S. 1898, as authorizing railroad conpanies to make contracts for rates binding upon the state when it resumes its...