Procter Gamble Company v. United States of America

• Citation: 56 L.Ed. 1091,32 S.Ct. 761,225 U.S. 282
• Decision Date: 07 June 1912
• Docket Number: No. 780,780
• Parties: PROCTER & GAMBLE COMPANY, Appt., v. UNITED STATES OF AMERICA, the Interstate Commerce Commission, the Cincinnati, Hamilton, & Dayton Railway Company, et al., Appellees
• Court: U.S. Supreme Court

225 U.S. 282

32 S.Ct. 761

56 L.Ed. 1091

PROCTER & GAMBLE COMPANY, Appt.,

v UNITED STATES OF AMERICA, the Interstate Commerce Commission, the Cincinnati, Hamilton, & Dayton Railway Company, et al., Appellees.

No. 780.

Argued January 11 and 12, 1912.

Decided June 7, 1912.

Mr. George H. Warrington for appellant.

Assistant Attorney General Denison and Mr. Blackburn Esterline, Special Assistant to the Attorney General, for the United States.

[Argument of Counsel from page 283 intentionally omitted] Mr. P. J. Farrell for the Interstate Commerce Commission.

Mr. Edward Barton for the Cincinnati, Hamilton, & Dayton Railway Company et al.

Mr. Chief Justice White delivered the opinion of the court:

Having three manufacturing plants, one at Ivorydale, Ohio, a second at Port Ivory, New York, and a third at Kansas City, Kansas, in which they carried on the business of refining cottonseed and other oils and of manufacturing soap and other products from grease and oil, the Procter &amp Gamble Company, to facilitate the transportation to their factories of the substances required for their operation, and of shipping out the finished products, became the owner of about five hundred railroad tank cars. The cars were exclusively devoted to the business of the company in the following manner: On the property of the company in the yards about their factories there were railroad tracks belonging to the company which served for holding empty or loaded cars, the cars thus situated being held for storage and for movement from place to place, as business required. At each of the factories there was also an interchange track connected with the tracks in the yards and with the tracks of the railroad company or companies through whom the business of shipping in interstate commerce to and from the factories was carried on. The movement of cars to the interchange tracks for outward shipment and from the interchange tracks when they were left there by railroad companies was at two of the factories carried on by the company through its own employees and motive power. At the other one this work was done by a railroad company, who made an independent and special charge for the service. The transportation of the private tank cars of the corporation by the railroad companies was governed by established rules, and the price paid to the railroads for transporting the commodities of the company in its private cars was the regular price fixed for such commodities in the established tariffs. The railroads, however, paid to the company for the use of its private cars a fixed sum per mile, this payment being also stated in the regular established tariffs in compliance with law. A portion of the carrier's rule (rule 29), relating to the subject of compensation for hauling such private tank cars, is in the margin.¹

In 1910, among others, the railroads engaged in transporting tank cars from the plants of the Procter & Gamble Company adopted a system of rules governing the payment of demurrage by shippers. The provisions of these rules pertinent to this case are excerpted in the margin.²

The rules in question were prepared by a committee of the National Association of Railroad Commissioners, composed of a representative from each state having a rail- road commission and a member of the Interstate Commerce Commission, and were adopted in convention by the National Association, and were subsequently approved by the Interstate Commerce Commission, although putting them in force was not imperatively prescribed by that body.

The Procter & Gamble Company, dissatisfied with the regulations concerning demurrage, in so far as they imposed in certain respects charges upon its tank cars, filed a complaint with the Interstate Commerce Commission, charging the rules to be repugnant to the act to regulate commerce because unjust and oppressive, and because to enforce them would create preferences and discriminations forbidden by the act. After hearing, the Commission made a report declaring that the rules complained of were in no sense in conflict with the act to regulate commerce, and on the contrary conformed to that act, and tended to prevent and repress unlawful preferences and discriminations. An award of relief was therefore denied. In February, 1911, the Procter & Gamble Company filed a petition in the commerce court of the United States, making defendants the United States, the Interstate Commerce Commission, and the railroads who had been complained of in the proceeding before the Commission. The petition recited the facts stated above as to the character of the business of the petitioner, the ownership of tank cars, etc., the establishment of the rules for demurrage, their repugnancy to the act to regulate commerce, the injury which had resulted from being compelled to pay the charges for demurrage in accordance with the rules, the application made to the Commission, and the refusal of that body to award relief. The conception upon which the petition was based is shown in the excerpt in the margin³, wherein it was also charged that the order of the Commission dismissing the complaint as above set forth 'is null and void and beyond the power of said Interstate Commission, in that it sustains the validity of . . . said demurrage rules.'

The prayer was as follows:

'Wherefore, complainant prays that the aforesaid order of said Interstate Commerce Commission made in said cause No. 3208 on November 14, 1910, be set aside and annulled, and that the defendant railway companies, and each of them, be enjoined from collecting or attempting to collect any demurrage charges upon complainant's loaded tank cars after said cars have been delivered to complainant and placed upon tracks owned or controlled by it; and further, that said defendant railway companies and each of them be required to repay to complainant herein all sums found to have been wrongfully collected by them, or any of them, under the rule here complained of; and that complainant be granted such other and further relief as it may be entitled to in the premises.'

The railroads answered the bill. The United States and the Interstate Commerce Commission appearing for the purpose, challenged the jurisdiction of the court to entertain the cause, and moved to dismiss, upon this general ground: 'Because the order of the Interstate Commerce Commission complained of directed no affirmative relief and the negatibe order of the Commission dismissing the complaint affords no ground for an action in this court;' and upon the following more detailed specifications filed on behalf of the United States:

'(a) It prays that the order of the Interstate Commerce Commission be enjoined, when said order directed no action against any party, and therefore the same is not subject either to enforcement or to injunction.

'(b) It prays that the defendant common carriers, who are not proper parties to this proceeding except on their own motion, be enjoined from collecting the demurrage mentioned, when no order inhibiting the same has been made by the Interstate Commerce Commission, and in the absence of such an order this court has no power to grant such relief.

'(c) It prays that the defendant common carriers be required to repay to complainant all sums heretofore wrongfully collected as demurrage, when this court has no power or jurisdiction to grant such relief, either with or without an order of the Interstate Commerce Commission directing such repayment.'

The court, declining at the threshold to consider the demurrers and motion to dismiss, postponed their consideration until the hearing on the merits. There was a consent by all the defendants except the United States and the Interstate Commerce Commission that the case be heard upon the evidence and documents introduced before the Commission and the report of the body. The United States and the Interstate Commerce Commission, however, on the overruling of its demurrer and a refusal to grant its motion to dismiss, elected to stand thereon and declined to plead further.

In disposing of the case, the court considered it in a twofold aspect,—first, as to its jurisdiction; and second, as to the merits of the case. On the first subject it held (a) that it had jurisdiction of the cause, and that the refusal of the Interstate Commerce Commission to afford relief to the Procter & Gamble Company was, for the purposes of jurisdiction of the court, the exact equivalent of an order of the Commission granting affirmative relief; and (b) as a corollary of this power it was further decided that there was jurisdiction to award pecuniary relief for demurrage if any was illegally exacted. On the merits, however, it was decided that the Interstate Commerce Commission had rightfully refused to grant relief and that there was no foundation for the contention that the property of the company in its private tank cars was taken without due process of law by the demurrage regulations. On this subject it was declared that as the company had accepted the provisions of the published tariffs concerning the use of the tank cars, therefore those cars were submitted to the regulations which the carriers had lawfully established. In other words, the court concluded that because the company had availed of the proffer of the railroads to use the cars in transportation and pay for their use a stated sum, the company had acquired no right to disregard restrictions against preferences and discriminations embodied in the act to regulate commerce.

The case was then brought here by the appeal of the Procter & Gamble Company. That company insists that the court below erred in not awarding the relief which was asked and in dismissing the petition. On the other hand, the Interstate Commerce Commission and the railroads insist that the court was right in refusing relief and dis- missing the bill. Before we can come, if at all, to consider the merits, however, it is necessary to dispose of the question...