Procter & Gamble Co. v. United States

• Citation: 188 F. 221
• Decision Date: 20 July 1911
• Docket Number: 9.
• Parties: PROCTER & GAMBLE CO. v. UNITED STATES et al.
• Court: United States Commerce Court

188 F. 221

PROCTER & GAMBLE CO. v. UNITED STATES et al.

No. 9.

Commerce Court.

July 20, 1911

George H. Warrington, for petitioner.

P. J Farrell, for Interstate Commerce Commission.

Blackburn Esterline, for United States.

Edward Barton, for respondent railroads.

Before KNAPP, Presiding Judge, and ARCHBALD, HUNT, CARLAND, and MACK, Associate Judges.

ARCHBALD Judge.

The Procter & Gamble Company, the petitioner, is engaged in the manufacture of soap, and the refining of cotton seed and other oils, and owns large industrial establishments at Ivorydale, Ohio, Port Ivory, N.Y., and Kansas City, Kan. In all its plants it has and maintains private railroad tracks for the purpose of receiving cars from the interchange tracks which connect it with the respondent railroads. At two of the places named it owns and employs its own locomotives and itself performs the entire switching of cars, and at the other the switching is performed by the railroads under contract, which is paid for separate and apart from the transportation charges. In every instance the tracks are owned by the company and are on its own land, and the railroads have no interest or control over them.

The Procter & Gamble Company is also the owner of 532 oil-tank cars, which it has purchased at a cost of about $500,000. These cars are necessary for the transportation of the oils grease, and other like commodities used by the company in its business, and were purchase by it in relief of the railroads which were and are not prepared to furnish them. These tank cars, when loaded by the petitioner at its several establishments, are tendered to the connecting railroads for shipment, and are hauled to their various destinations at the regular published rates for the respective commodities with which they are loaded. The use of these cars is confined to the petitioner's business, and in consideration of the petitioner furnishing them an allowance is made by the railroads of three-quarters of a cent a mile per car for each mile that it is hauled; this allowance being in accordance with the published tariffs of the railroads with respect to the movement of all private tank cars.

Until the adoption of the rule set forth below, no demurrage was ever charged by any of the respondent railroads for delay in unloading private tank cars while standing on the private tracks of the owner.

But beginning in February, 1910, and following that, the railroads have published, as part of their so-called 'Uniform Demurrage Code,' the following rule, which is the subject of this controversy:

'Private cars while in railroad service, whether on the carrier's or private tracks, are subject to these demurrage rules to the same extent as cars of railroad ownership.

'Empty private cars are in railroad service from the time they are placed by the carrier for loading, or tendered for loading on the orders of the shipper.

'Private cars under lading are in railroad service until the lading is removed and the cars are regularly released.

'Cars which belong to an industry performing its own switching service are in railroad service from the time they are placed by the industry upon designated interchange tracks, and thereby tendered to the carrier for movement. If such cars are subsequently returned empty, they are out of service when withdrawn by the industry from the interchange; if returned under load, railroad service is not at an end until the lading is duly removed.'

The demurrage rules, of which this is a part, were prepared by a committee of the National Association of Railway Commissioners, composed of a representative from each state having a railroad commission, and a member of the Interstate Commerce Commission; and were adopted by the association in convention and later approved, although not prescribed, by the Interstate Commerce Commission.

After the publication of the rule in controversy, but before it had gone into effect, the Procter & Gamble Company made complaint to the Interstate Commerce Commission, and sought to have the rule set aside, in so far as it permitted the railroads to make a demurrage charge against the private cars of the company after they had been delivered to it and were standing on its own private tracks. But after a due hearing the commission dismissed the complaint, and the respondent railroads are now exacting demurrage charges in accordance with the provisions of the rule.

The proceedings in this court are brought to set aside the order of the commission dismissing the complaint and refusing relief; the allegation being made that the rule, in so far as it provides that privately owned cars under lading on private tracks are in railroad service, and so subject to a demurrage charge until the lading is removed, is unjust and unreasonable and deprives the company of the right to use its private cars on its private tracks for its own purposes unless demurrage is paid therefor, thereby permitting the respondent railroads to deprive the company of its property without due process of law, in violation of the fifth amendment to the Constitution and the acts regulating interstate commerce. The prayer of the petition is that the order of the commission dismissing the complaint may be annulled and the respondent railroads enjoined from collecting the demurrage charge, and that they may be further required to repay to the petitioner the sums which they have wrongfully collected from it under the rule.

The United States moves to dismiss the petition on the ground that this court has no jurisdiction in the premises; or that, if it has, no cause of action is made out which entitles the petitioner to relief.

And in this motion the Interstate Commerce Commission and the several railroads which have been summoned as respondents join.

The jurisdiction of this court is denied on the ground that the petitioner is a shipper, and the Interstate Commerce Commission having merely dismissed the complaint which was made to it, and granted no affirmative relief, that there is nothing in the order of dismissal which it entered that affords any basis for action here. Or, in other words, that it is only the carrier against which an order is made in favor of the shipper that can bring the case for review into this court; the shipper being concluded by the action of the commission, whatever it may chance to be. This is a serious question, which merits careful consideration and is not altogether easy to solve.

By the act by which the Commerce Court was created (Act June 18, 1910, c. 309, 36 Stat. 539), it was given 'the jurisdiction now possessed by Circuit Courts of the United States and the judges thereof' of, inter alia, 'cases brought to enjoin, set aside, annul, or suspend in whole or in part any order of the Interstate Commerce Commission. ' It was also therein further provided that 'in all cases within its jurisdiction the Commerce Court and each of the judges assigned thereto shall respectively have and may exercise any and all the powers of a Circuit Court of the United States, and of the judges of said court respectively, so far as the same may be appropriate to the effective exercise of the jurisdiction hereby conferred'; and, conversely, that nothing in the act should be construed as enlarging the jurisdiction at the time possessed by said Circuit Courts, or the judges thereof, thereby transferred to and vested in the Commerce Court; the jurisdiction, however, so far as conferred, to be exclusive, and so far as not conferred being reserved. The question, then, is whether upon any recognized ground of equity practice the present petitioner, under the law as it previously stood, would have had the right to apply by bill to a Circuit Court of the United States to set aside the action of the Interstate Commerce Commission dismissing its complaint, and to enjoin the enforcement by the railroads of the demurrage charge which in effect was thereby approved.

It is of no significance in this connection, nor of any assistance in the solution of the question, that suits in this court to enjoin, set aside, annul, or suspend any order of the commission are required to be brought against the United States. It is just as consistent that the United States should be the respondent in cases brought for this purpose by the shipper as in cases brought by the carrier; the government in each case standing for the order of the commission which it is thus appointed to justify and defend.

Neither does it detract from the jurisdiction of this court that, under the law as it previously stood, the venue of suits brought in the Circuit Courts of the United States against the commission to set aside its orders was fixed in each case in the district where the carrier against which the order was made had its principal operating office; jurisdiction to hear and determine such suits being in terms vested in the courts of such district. Act June 29, 1906, c. 3591, Sec.

16, 34 Stat. 592 (U.S. Comp. St. Supp. 1909, p. 1162).

This was a favor to the carrier adversely affected by the order. And, according to the law at the time, the commission being the respondent, provision had to be made for jurisdiction over it by the courts of the various districts throughout the country where it was liable to be summoned. It was to meet this situation that jurisdiction was given in terms over suits of the character mentioned to the courts of the district where the carrier against which the order was made had its principal office. Nothing more was intended, and nothing more is to be made out of this provision of the law. Certainly nothing adverse to possible suits by others than the carrier is to be thereby implied.

The real argument against the right of suit, where the complaint of...