Powell v. United States

• Decision Date: 10 June 1940
• Docket Number: No. 4597.,4597.
• Citation: 112 F.2d 764
• Parties: POWELL et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

112 F.2d 764 (1940)

POWELL et al. v. UNITED STATES.

No. 4597.

Circuit Court of Appeals, Fourth Circuit.

June 10, 1940.

Murray Allen, of Raleigh, N. C., and Joseph F. Johnston, of Norfolk, Va., for appellants.

H. L. Maine, Sp. Asst. to U. S. Atty., of Wilmington, N. C. (James O. Carr, U. S. Atty., of Wilmington, N. C., John H. Manning, Asst. U. S. Atty., of Raleigh, N. C., and Charles F. Rouse, Asst. U. S. Atty., of Kinston, N. C., on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

PARKER, Circuit Judge.

Appellants, in their capacity as receivers of the Seaboard Air Line Railway Company, were indicted in the court below, along with the Atlantic and North Carolina Railroad Company and the receivers of the Norfolk Southern Railroad Company, for violation of section 1 of the Elkins Act, 49 U.S.C.A. § 41, in failing to observe their published tariffs in connection with a shipment of scrap iron for export from Goldsboro, N. C. to Wilmington, N. C. The other defendants entered pleas of nolo contendere and were fined $1,000 each. Appellants waived jury trial, and, upon being found guilty by the judge, were fined the same amount. The sole question presented by the appeal is the sufficiency of the evidence to sustain the conviction; but this must be considered in connection with three contentions of appellants: (1) That the shipment was one in intrastate and not interstate or foreign commerce, (2) that the violation of the act was not wilful, and (3) that the receivers were not chargeable with responsibility therefor.

The shipment of scrap iron was made in July 1936 from Goldsboro to Wilmington, which is 84 miles distant by direct route. The shipment was not made over this direct route, however, which was the line of the Atlantic Coast Line Railroad Company, but over the Atlantic and North Carolina to New Bern, N. C., over the Norfolk & Southern from New Bern to Raleigh, N. C., and over the Seaboard Air Line from Raleigh to Wilmington, a total distance of 401 miles. The rate collected was $1.45 per hundred pounds, which was the rate for shipment by direct route from Goldsboro to Wilmington of both interstate and intrastate shipments. The interstate tariffs provided that the $1.45 rate was applicable only over lines where the haul did not exceed 153 miles. As the haul here exceeded 400 miles, it had no application; and the rate applicable under the tariffs was $2.50 per hundred.

The shipment was made by the Goldsboro Iron and Metal Company in the name of B. Schwartz to Schwartz under an order notify bill of lading. Prior to shipment, Schwartz had contracted to sell the scrap iron, subject to inspection, to Luria Bros.; and they in turn had contracted to sell it to Mit Sui & Company, a Japanese firm. Schwartz testified that this car of scrap iron was purchased for export under his contract with Luria Bros. The shipping order contained on its face the notation, "for export". A like notation was entered on the way bill which came into possession of the agents of appellants; and the freight receipt which they issued bore a like annotation. That the shipment was regarded by all parties as one in interstate or foreign commerce is shown by the fact that the agents of appellants assessed on the shipment certain emergency charges (known as "increased rate" or "IR"), applicable at that time only on shipments in interstate or foreign commerce and not on intrastate transportation. Upon its arrival in Wilmington, the carload of scrap iron was promptly loaded into the S. S. Helgoy, which had been chartered by Luria Bros., and which cleared from Wilmington for Japan with a cargo of scrap iron for the account of Mit Sui & Company.

There can be no question but that this evidence was sufficient to sustain a finding by the court that the shipment from Goldsboro to Wilmington was but a step in the transportation of the scrap iron to its real and ultimate destination in a foreign country. The case is not one of shipment to a point of collection or distribution, where the original movement comes to an end and further transportation depends upon sale or other circumstance. The journey in foreign commerce had commenced, and the mere fact that transfer of title at the port was contemplated and that inspection with right of rejection was provided for, did not change its essential character. Directly in point, we think, is the case of Texas & N. O. R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 S.Ct. 229, 234, 57 L.Ed. 442, a case involving a shipment of lumber from an inland point in Texas to the port of Sabine, Texas, for export. In holding that the fact that a foreign destination was intended at the time of shipment was determinative, and that the character of the shipment as being one in foreign commerce was not affected by the fact that it was shipped to the exporter under an order notify bill of lading or that the original shipper had no further control over it after its arrival at the port of Sabine, the court said: "It is said, however, that the Sabine Company had no connection with the lumber after its arrival at Sabine, and had no concern with its destination after it came into the hands of Powell Company, and had no particular knowledge thereof. Like circumstances undoubtedly existed in Southern Pacific Terminal Co. v. Interstate Commerce Commission 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310. It did not prevail there and cannot prevail here. The determining circumstance is that the shipment of the lumber to Sabine was but a step in its transportation to its real and ultimate destination in foreign countries. In other words, the essential character of the commerce, not its mere accidents, should determine. It was to supply the demand of foreign countries that the lumber was purchased, manufactured, and shipped, and to give it a various character by the steps in its transportation would be extremely artificial. Once admit the principle, and means will be afforded of evading the national control of foreign commerce from points in the interior of a state. There must be transshipment at the seaboard, and if that may be made the point of ultimate destination by the device of separate bills of lading, the commerce will be given local character, though it be essentially foreign."

Also directly in point, although involving import rather than export, is United States v. Erie R. Co., 280 U.S. 98, 50 S.Ct. 51, 52, 74 L.Ed. 187. The movement there was from the port of Hoboken, N. J. to Garfield, N. J. A shipment of wood pulp had been purchased in a foreign country through a broker. It was shipped to the broker as part of a larger shipment. The broker had it taken from the vessel at Hoboken and shipped by rail to Garfield under new and local bills of lading. Title did not pass to the purchaser until shipment by the broker at Hoboken. In holding the shipment one in foreign commerce to which the interstate rates prescribed by the Interstate Commerce Commission were applicable, the court said: "The carriers contend that title to the pulp does not pass to the company until the broker arranges, at the Hoboken dock, for shipment of the specific lot to Garfield; that the shipment by the mill to its agent, as consignee, of pulp in quantity exceeding that ultimately destined to Garfield, terminates, when the pulp is delivered on dock at Hoboken; that this foreign shipment is distinct from the subsequent shipment by the broker to Garfield of the smaller quantity, under a new and local bill of lading; and that therefore the rail movement from Hoboken to Garfield is an independent intrastate transaction. But the nature of the shipment is not dependent upon the question when or to whom the title passes. Pennsylvania R. Co. v. Clark Bros. Coal Mining Co., 238 U.S. 456, 465, 466, 35 S.Ct. 896, 59 L.Ed. 1406. It is determined by the essential character of the commerce. Baltimore & Ohio S. W. R. Co. v. Settle, 260 U.S. 166, 170, 43 S.Ct. 28, 67 L.Ed. 189. It is not affected by the fact that the transaction is initiated or completed under a local bill of lading which is wholly intrastate, Ohio R. R. Commission v. Worthington, 225 U.S. 101, 108-110, 32 S.Ct. 653, 56 L.Ed. 1004; Texas & New Orleans R. Co. v. Sabine Tram Co., 227 U.S. 111, 33 S.Ct. 229, 57 L.Ed. 442; Hughes Bros. Timber Co. v. Minnesota, 272 U.S. 469, 47 S.Ct. 170, 71 L.Ed. 359; or by the fact that there may be a detention before or after the shipment on the local bill of lading, Carson Petroleum Co. v. Vial, 279 U.S. 95, 49 S.Ct. 292, 73 L.Ed. 626. The findings of the commission, that the broker acts only as agent and that from the time that the pulp is put aboard the steamer there is a continuing intent that it should be transported to Garfield, ought to have been accepted by the District Court as conclusive, since there was ample evidence to sustain them. Western Paper Makers' Chemical Co. v. United States, 271 U.S. 268, 46 S.Ct. 500, 70 L.Ed. 941; Virginian...