Southern Pac. Co. v. State Corp. Commission

• Decision Date: 06 October 1931
• Docket Number: Civil 3022
• Parties: SOUTHERN PACIFIC COMPANY, a Corporation, Appellant, v. THE CORPORATION COMMISSION OF THE STATE OF ARIZONA, LOREN VAUGHN, AMOS A. BETTS and W. D. CLAYPOOL, as Members of and Constituting Said Commission, Appellees
• Court: Arizona Supreme Court

3 P.2d 518

39 Ariz. 1

SOUTHERN PACIFIC COMPANY, a Corporation, Appellant, v. THE CORPORATION COMMISSION OF THE STATE OF ARIZONA, LOREN VAUGHN, AMOS A. BETTS and W. D. CLAYPOOL, as Members of and Constituting Said Commission, Appellees

Civil No. 3022

Supreme Court of Arizona

October 6, 1931

APPEAL from a judgment of the Superior Court of the County of Maricopa. A. S. Gibbons, Judge. Reversed and remanded, with directions to enter judgment for appellant.

Mr. Del W. Harrington and Messrs. Baker & Whitney, for Appellant.

Mr. K Berry Peterson, Attorney General (Messrs. Sutter & Gentry, of Counsel), for Appelles.

OPINION

ROSS, J.

This is an appeal by the Southern Pacific Company from a judgment and order of the superior court of Maricopa county affirming and approving an order and decision of the Corporation Commission directing said appellant to refund to the Shattuck-Denn Mining Corporation certain switching charges.

The action in the superior court and this appeal are provided for in section 720 of the Revised Code of 1928.

On December 23, 1924, an application of the Shattuck-Arizona Copper Company was filed with the Corporation Commission alleging that the switching charges of the El Paso &amp Southwestern Railroad Company and the Southern Pacific Company were unjust, unreasonable, and excessive. Thereafter a hearing was had upon such application, at which time the Shattuck-Denn Mining Corporation had succeeded to the rights of the Shattuck-Arizona Copper Company and the Denn-Arizona Copper Company, also a shipper; and the Southern Pacific Company had acquired the control of the El Paso &amp Southwestern Railroad Company.

Herein we shall refer to the Southern Pacific Company as the carrier and the Shattuck-Denn Mining Corporation as the complainant.

The commission found it unnecessary to determine whether the charges were unjust, unreasonable or excessive, but held the question was one of tariff interpretation.

On July 1, 1922, the El Paso & Southwestern Railroad Company (predecessor of appellant) filed with the Corporation Commission a tariff schedule in which the various switching services the carrier performed were classified and defined as follows:

"Intra-plant switching: A switching movement from one track to another within the same plant or industry.

"Intra-terminal switching: A switching movement (other than intra-plant switching) from one track to another of the same road within the switching limits of one station or industrial switching district.

"Inter-terminal switching: A switching movement from a track of one road to a track of another road when both tracks are within the switching limits of the same station or industrial switching district."

The rate for intra-plant switching was fixed at $3.60 per car movement and for intra-terminal and inter-terminal at $7.20 per car movement.

The carrier had charged the complainant and its predecessors for intra-terminal movements. The commission held the movements were intra-plant, and ordered the carrier to refund to the complainant $3.60 on each car movement.

This suit was brought by the Southern Pacific Company to test the correctness of the commission's order, and resulted in its approval by the trial court. The same question is presented on this appeal. It was stipulated in the trial that the question involved is, "Was the service or movement involved an intra-plant or an intra-terminal movement?" Thus the question of the reasonableness or unreasonableness of the charges is eliminated. Appellant, Southern Pacific Company, contends the movements were intra-terminal, and that the commission and the trial court, in holding that they were intra-plant, erred.

The pertinent facts are, and we take them largely from appellant's brief, the appellee not disputing them: That the tracks and spurs over which the movements were made, as also the right of way, belong to the carrier, and are all within the Bisbee switching district, which includes the yard limits at Bisbee Junction on the main track of the carrier and all intermediate trackage between that point and the end of the branch line, extending from Bisbee Junction into Bisbee; that the distance from the ore bins, where the ore is loaded on the cars, to Bisbee is 2,235 feet, and that the distance from the end of the main line at Bisbee to the switch of what is known as the Denn main spur, just below Lowell, is 10,822.3 feet, and that the distance from the Denn main spur to the switch of the mill spur is 3,704.5 feet; that the total distance of the movement from the Shattuck ore-bins, upon what is called the high line, to the unloading bins at the mill is 17,915 feet, approximately 3.4 miles; that there is located at the mine a hoist, buildings and all equipment and facilities for bringing ore out of the ground to the surface of the earth and loading it into the cars, and that the mill consisted of mill bins, dryatory crusher, Simms Ball Mills, flotation machines, filter and storage for ore concentrates, and all facilities necessary for the concentration of ores; that there were produced at the mine two classes of ores, a high grade and a low grade; that the high grade could be shipped directly to the customs mill at Douglas, Arizona, or to El Paso, Texas, without being concentrated at Bisbee; but that it was necessary to concentrate the low grade before it could be shipped with profit.

The commission, in arriving at the conclusion that the movements were intra-plant, reasoned this way. They said the business of complainant consisted of two units: One the production of ore at the mine, and one the reduction of that ore at the mill; that it was necessary that the ore be reduced because its quality and value would not permit a substantial transportation charge; that the industry could not function without both units, and that one would be of no value without the other, and therefore the two units constituted a plant or industry.

The appellant contends that, in determining whether the car movements were intra-plant or intra-terminal, the necessity of reducing the ore before it could be made profitable is aside from and foreign to the question, for two reasons:

(1) That it is the character of service rendered by the carrier, and not the business motives or commercial reasons of the shipper in causing his commodity to be shipped or the service to be rendered, that determines the rates and charges. The carriers do not fix their charges upon the ability of the commodity shipped to stand such charges. But for the same service the same rate must be charged, even though the result might be that one shipper's commodity could, and another's could not, stand that charge. This seems to be a cardinal rule in rate-fixing. For instance, the passenger is charged for the accommodations afforded and the length of his journey, but in no case is such charge predicated upon the reason or purpose of the passenger in making the journey. This rule has been many times announced and adhered to by the Inter-State Commerce Commission and also the courts. Interstate Commerce Commission v. Baltimore & O. Ry. Co., 225 U.S. 326, Ann. Cas. 1914A 504, 56 L.Ed. 1107, 32 S.Ct. 742; Pennsylvania R. Co. v. International Coal Min. Co., (C.C.A.) 173 F. 1 (reversed in 230 U.S. 184, 57 L.Ed. 1446, 33 S.Ct. 893, on another point); Brainerd Fruit Co. v. Chicago G.W.R. Co., 163 I.C.C. 585; Louisville Cement Co. v. Pennsylvania R. Co., 163 I.C.C. 199; In re Rules Governing Ratings of Coal Mines, 95 I.C.C. 309; Potomac Electric Power Co. v. Chesapeake & O. Ry. Co., 152 I.C.C. 641.

(2) For a stronger reason it is said the use or purpose or reason influencing the shipper to ship his commodity cannot vary the rates or classifications as filed with and approved by the Corporation Commission; that such schedules have the force of statutes. To this point citation is made of section 12 of article 15 of the Constitution, as follows:

"All charges made for service rendered, or to be rendered, by public service corporations within this State shall be just and reasonable, and no discrimination in charges, service, or facilities shall be made between persons or places for rendering a like and contemporaneous service. . . ."

Attention is also directed to sections 675 and 676, Revised Code of 1928, which provide that every common carrier shall file with the Corporation Commission a schedule of rates, classifications, etc., and prohibit any departure therefrom except upon the consent of the commission after notice and a hearing.

It would seem, therefore, that in determining whether the movements were intra-plant no consideration should be given to the suggestion that the commodity as extracted from the mine could not stand a transportation charge, or the necessity for the reduction of the ore.

Appellees admit, or at least do not controvert, the above propositions. They say the necessity of reducing the ore was considered by the commission in the interpretation of the schedule, and was put in only for the purpose of showing the necessity of operating the mill in conjunction with the operation of the mine. This, of course, makes the question as to whether the mine and mill are units of one plant or industry turn upon the character of the ore. If it needs to be reduced and concentrated before it will bear the transportation, they are together one plant or industry, according to the appellees' reasoning, and this regardless of the distance they may be apart.

It is obvious the movements in question must be determined by their nature and character and not by the necessities of the shipper. The rates for switching cars, as set forth in the tariff, show clearly they are based upon the character and amount of services rendered. The principle of graduating the...