Pennsylvania Railroad Company v. Puritan Coal Mining Company

• Citation: 35 S.Ct. 484,237 U.S. 121,59 L.Ed. 867
• Decision Date: 11 November 1914
• Docket Number: No. 76,76
• Parties: PENNSYLVANIA RAILROAD COMPANY, Plff. in Err., v. PURITAN COAL MINING COMPANY. Argude
• Court: United States Supreme Court

237 U.S. 121

35 S.Ct. 484

59 L.Ed. 867

PENNSYLVANIA RAILROAD COMPANY, Plff. in Err.,

v PURITAN COAL MINING COMPANY.

No. 76.

Argude November 11, 1914.

Decided April 5, 1915.

In March, 1908, the Puritan Coal Mining Company brought suit in the court of common pleas of Clearfield county, Pennsylvania, against the Pennsylvania Railroad Company for damages caused by the latter's failure to furnish cars needed for the transportation of coal. On November 21, 1908, the plaintiff filed a 'Statement of Claim' in which it was alleged that the defendant was a common carrier of freight between points within the state of Pennsylvania, and as such bound to furnish shippers with adequate facilities for the transportation of coal, but that the carrier did not, as required by law, furnish the plaintiff with sufficient cars to enable it to transport coal mined by it. By reason of such failure to perform its duty and legal obligation, the defendant caused the plaintiff damage to the extent of $260,777.

Other paragraphs in the statement alleged that the carrier established and published the capacity of all coal mines in the region reached by its railway; that, as a common carrier, it was bound to furnish cars upon the basis of equality in proportion to the rated capacity of plaintiff's mines. But, disregarding its duty, under the statute of the state, the defendant did, unreasonably as well as unlawfully, refuse to furnish the plaintiff with its pro rata share of coal cars held for daily distribution, and did subject the plaintiff to unreasonable disadvantage in that it favored and did unduly and unreasonably discriminate in favor of the Berwind-White Coal Company by giving to the latter 500 cars before distributing any to the plaintiff. By reason of the undue and unjust discrimination against the plaintiff and the undue preference in favor of the Berwind-White Company the plaintiff was not furnished with the cars to which it was entitled, and thereby lost the profit of $260,777 which it could and would have made on coal which it could and would have shipped had it received its due proportion of cars.

On November 23, 1908, and again in April, 1911, other statements were filed which repeated and amplified the charge of unjust discrimination in the distribution of cars whereby the plaintiff received less and the Berwind-White Company more than was proper under the rule of allotment established by the carrier.

The defendant moved to dismiss the case because the state court was without jurisdiction. The court held that the motion was bad as a demurrer, bad as a plea in abatement, and dismissed it as having been prematurely made. The defendant filed no other defense except a plea of the statute of limitations as to certain items of damage claimed in an amendment to the original statement.

By consent the case was heard by the judge without a jury. He made a report of the facts from which it appears that: Ordinarily the carrier was able to furnish shippers with cars on demand; but in 1902 there was a strike in the anthracite region which cut off the usual supply of anthracite coal to eastern cities and compelled them to use bituminous coal mined along the lines of the Pennsyl- vania Railway. The new demand for soft coal was so great that the railroad company was not able to supply the full number of cars called for by the mining companies on its line. Its established rule in such cases was that cars should be allotted to the several coal districts in proportion to their output, the cars thus allotted to the districts being then distributed to the mining companies therein in proportion to their capacity. During the anthracite coal strike, however, the carrier violated this rule and made excessive allotments to the 'scalp level region,' in which the Berwind mines were located, and made too small an allotment to the 'mountain region,' in which the Puritan mines were situated.

There was evidence that the Puritan Company had orders for coal at a price which would have netted it a large profit. The coal so ordered was to be delivered 'free on board' the cars at the Puritan mines,—the purchaser and consignee paying the freight to points of destination within and without the state. There was evidence that the Puritan Company was ready, willing, and able to make such sales and deliveries, and constantly demanded cars in order to enable it to fill these orders. Sometimes the carrier for days would fail to furnish cars, with the result that the company's mining operations were seriously interrupted. Sometimes the Puritan got cars, but not the full number to which it was entitled on the basis of distribution according to mine capacity, although the Berwind-White Company during the same period received more than its proportion.

The railroad company's elaborate and detailed distribution sheets were introduced in evidence. They showed the number of cars to be allotted to mines on the basis of capacity for each day of the period during which the car shortage existed. From these sheets and the other evidence in the case it appeared that the Berwind Company received many more cars than its share, and that the Puritan received several thousand less than its proportion. There was proof as to the number of tons these cars could have hauled; that the Puritan had orders for coal which it would have sold if these cars had been furnished; there was also evidence as to the royalty and cost of production, with data on which to make calculation of the damage resulting from the failure to receive cars.

The trial judge held that the state court had jurisdiction, and entered a judgment for the plaintiff, which, with interest, amounted to $74,323.88. Exceptions to the report were overruled and the case was taken to the supreme court of Pennsylvania on assignments in which complaint was made that the trial judge erred —

'(1) in holding that the state court had jurisdiction;

'(2) in failing to hold that, under the commerce act [24 Stat. at L. 379, chap. 104, Comp. Stat. 1913, § 8563], the Federal court alone had jurisdiction;

'(3) in holding that the business between the Puritan Company and the railroad was intrastate business where coal was sold F. O. B. the cars at the mines;

'(4) in holding that the plaintiff could recover damages for failure to receive cars intended for use in shipping coal outside the state;

'(5) in adopting the method for distributing cars on which the damages were collected;

(6) in failing 'to take into account the private or individual cars, so-called, which were delivered to the plaintiff during the period of the action in determining the number which it would have been entitled to receive of the additional cars which the court has found should have been allotted to the region or district in which the plaintiff's mines were located.'

Messrs. Francis I. Gowen, Frederic D. McKenney, and John G. Johnson for plaintiff in error.

Messrs. A. L. Cole and A. M. Liveright for defendant in error.

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court:

The Pennsylvania Railroad Company, an interstate carrier, was sued in a state court for damages caused by its failure to furnish the Puritan Company with cars in which to load coal for shipment to points within and without the state. The pleadings alleged not only that the carrier had failed to perform its duty to furnish cars, but that, in violation of a state statute, it had unjustly discriminated against the Puritan Company by failing to distribute cars in accordance with the carrier's own rule that, in time of shortage, they should be allotted to the coal companies on the basis of mine capacity.

The trial court held that the plaintiff was entitled to recover damages caused by the unjust discrimination in distribution of cars. The supreme court of Pennsylvania did likewise and affirmed the judgment in favor of the plaintiff. 237 Pa. 420, 85 Atl. 426, Ann. Cas. 1914B, 37.

The railway company then brought the case here, insisting in effect that (1) the determination of the proper basis for the distribution of cars was a matter calling for the exercise of the power of the Interstate Commerce Commission; (2) that no court had jurisdiction of a suit against it for discriminatory allotment until after the Commission had determined that its rule for distribution was improper; and (3) that no suit for damages against an interstate carrier could be brought for damages occasioned by a failure to deliver cars, or for an unjust discrimination in distribution except in a United States court.

1. These contentions involve a consideration of the jurisdiction of the Commission, of the state courts, and of the Federal courts. But fortunately it will not be necessary to enter into an elaborate discussion of each of the questions.

Section 3¹ of the commerce act [24 Stat. at L. 380, chap. 104, Comp. Stat. 1913, § 8565] makes it unlawful for the carrier to unduly prefer one shipper over another. Section 8² gives a right of action against the carrier for damages occasioned by his doing an act prohibited by the statute, and § 9 provides:

'That any person or persons claiming to be damaged by any common carrier subject to the provisions of this act may either make complaint to the Commission as hereinafter provided for, or may bring suit in his or their own behalf for the recovery of the damages for which such common carrier may be liable under the provisions of this act, in any district or circuit court of the United States of competent jurisdiction; but such person or persons shall not have the right to pursue both of said remedies, and must in each case elect which one of the two methods of procedure herein provided for he or they will adopt. . . .'

It will be seen that this section does more than create a right and designate the court in which it is to be enforced. It gives the shipper the option to proceed before the Commission or in the Federal courts. The...