United States v. Pennsylvania Railroad Company United States v. Pennsylvania Railroad Company

• Decision Date: 11 December 1916
• Docket Number: Nos. 340 and 341,s. 340 and 341
• Citation: 242 U.S. 208,61 L.Ed. 251,37 S.Ct. 95
• Parties: UNITED STATES and Interstate Commerce Commission, Appts., v. PENNSYLVANIA RAILROAD COMPANY. UNITED STATES, Interstate Commerce Commission, and Crew-Levick Company, Appts., v. PENNSYLVANIA RAILROAD COMPANY
• Court: U.S. Supreme Court

242 U.S. 208

37 S.Ct. 95

61 L.Ed. 251

UNITED STATES and Interstate Commerce Commission, Appts.,

v PENNSYLVANIA RAILROAD COMPANY.

UNITED STATES, Interstate Commerce Commission, and

Crew-Levick Company, Appts.,

v. PENNSYLVANIA RAILROAD COMPANY.

Nos. 340 and 341.

Argued October 18 and 19, 1916.

Decided December 11, 1916.

On petition of the Pennsylvania Paraffin Works and the Crew-Levick Company the Interstate Commerce Commission made the following order:

'It is ordered, that the Pennsylvania Railroad Company be, and it is hereby, notified and required to cease and desist, on or before August 15, 1915, and thereafter to abstain, from refusing upon reasonable request and reasonable notice therefor to provide and furnish tank cars to the complainants herein for interstate shipments of petroleum products, which refusal has been found in said report to be in violation of the provisions of the act to regulate commerce and amendments thereto.

'It is further ordered, that said defendant be, and it is hereby, notified and required to provide, on or before August 15, 1915, and thereafter to furnish, upon reasonable request and reasonable notice, at complainants' respective refineries, tank cars in sufficient number to transport said complainants' normal shipments in interstate commerce.

'And it is further ordered, that this order shall continue in force for a period of not less than two years from the date when it shall take effect.'

The time of compliance was subsequently extended to November 15, 1915, on which date the railroad company brought this suit to enjoin the enforcement of the order. A preliminary injunction was prayed, and, upon a hearing by three judges, was granted. 227 Fed. 911. To review that action this appeal is prosecuted.

The Commission made quite elaborate findings, which, however, we do not think it is necessary to quote in full. It found the production of the oil companies, and the following additional facts:

(1) That 91 per cent of the oil produced by the Paraffin Company was shipped in tanks, 1 1/2 per cent in barrels loaded in cars other than tank cars, and 7 1/2 per cent in pipe lines, while of the shipments made by the other company 86.8 per cent moved in tank cars, 4.7 per cent in barrels and 8.5 per cent in pipe lines.

(2) For a long time the bulk of refined oil in the United States has been shipped in tank cars and at present 91 per cent is so transported. The railroad has been using tank cars for twenty-five years. The capacity of the cars is found, and they are so constructed that they may be rapidly loaded at the refineries, and jobbers and dealers in refined oil throughout the country have the proper and necessary facilities for unloading the cars by gravity at their various stations.

(3) The only other method of transporting oil is in barrels or similar containers, the cost of which is from 3 1/2 to 3 3/4 cents a gallon above the cost of transportation in tank cars, and this makes such method of transportation practically prohibitive, and the refusal of the railroad to furnish an adequate supply of tank cars would tend to drive out of business refiners who are unable to supply themselves with enough cars to move their own products; and witnesses for the railroad admitted that tank cars are an economic necessity for the transportation of refined products.

(4) In 1887 the railroad acquired 1,308 tank cars, some of which have since been sold to independent refiners, but it owned at the time of the hearing 499 cars, of which 482 are furnished to shippers of oil located on its lines.

(5) At the time of the hearing the Paraffin Company owned 54 tank cars and the Crew-Levick Company 57; and it was testified that these companies for five or six-years have daily made inquiry for the delivery of cars to them, and that formal orders for cars have been constantly on file in the railroad's offices.

(6) On November 11, 1912, shortly before the filing of the complaints before the Commission, complainants served notice upon the railroad company, requesting it to furnish a sufficient number of tank cars to ship respectively 450,000 gallons of oil per month from the Paraffin Company's refinery at Titusville, and 600,000 gallons per month from the Glade (Crew-Levick Co.) Oil Works at Warren.

To the request of complainants, the railroad company replied:

'We beg to say that the railroad company is not pre- pared to increase its present tankcar equipment, but is prepared to transport the commodities in question when properly contained in barrels or other similar retainers at rates that are fair, reasonable, and nondiscriminatory.'

Solicitor General Davis and Mr. Robert Szold for the United States.

Mr. Justice McKenna, after stating the case as above, delivered the opinion of the court:

The question in the case is, Has the Commission the jurisdiction exercised by the order? It is not denied that the Commission has power over the general equipment of a carrier, but it is denied that it has power to require 'vehicles of a special type having no reference to the safety of transportation,' and to this distinction the argument of counsel for the railroad company is addressed.

The judgment of the district court had somewhat broader basis. The court said: 'The act to regulate com-

[Argument of Counsel from pages 212-217 intentionally omitted] Mr. Joseph W. Folk for the Interstate Commerce Commission.

Messrs. John G. Johnson, Thomas Patterson, Frederic D. McKenney, and Henry Wolf Bikle for the Pennsylvania Railroad Company.

Messrs. Charles D. Chamberlin and David Wallerstein for the Crew-Levick Company.

Messrs. Samuel B. Clarke and Charles W. Atwater as amici curiae.

Statement by Mr. Justice McKenna: merce does not confer upon the Interstate Commerce Commission all power over cars and other instrumentalities of shipment.' And that, aside from special enactments, 'Federal legislation regulating commerce, in so far, at least, as it is contained in the act of 1887 [24 Stat. at L. 379, chap. 104, Comp. Stat. 1913, § 8563 ] and its amendments, has thus far left carriers free to exercise their own judgment in the purchase, construction, and equipment of their roads and in the selection of their rolling stock.' Indicating that the law conferred upon the Commission the power to prevent and redress unfair practices and discriminations, the court further said: 'We find nothing in the law which confers upon the Commission power to compel a carrier to acquire facilities it does not possess, or to acquire better facilities than those it possesses, not with the object of preventing discrimination and preferences, but in order that the shipper may have larger, better, and perhaps more economical facilities.'

And coming to consider the question of power conferred by the Interstate Commerce Act of 1887, as amended in 1906 [34 Stat. at L. 584, chap. 3591, Comp. Stat. 1913, § 8563], the court decided that the amendment 'added nothing to the original duty of the carrier as prescribed by the original act and as interpreted by the Commission, and vested in the Commission no increase of power over cars as instrumentalities of shipment.'

To this proposition the United States and the Commission oppose the contentions that 'it is the duty of every interstate carrier to provide and furnish upon reasonable request such cars as are reasonably necessary for handling the normal traffic of which it is a common carrier,' and that the Commission is given jurisdiction to enforce the duty.

The power of the Commission has been given precedence and dominance in the argument, the extent of the duty of carriers coming in secondarily, though important to be considered. In other words, the main question pre- sented is, whatever be the duty of carriers as to the equipment they must have or furnish, whether the Interstate Commerce Commission is the tribunal to enforce the duty.

A comparison of the act as passed in 1887 with the amendment of 1906 becomes necessary, and a consideration of the rulings under the former as an interpreter of the latter.

The Act of 1887 (24 Stat. at L. 379, chap. 104, Comp. Stat. 1913, § 8563) provided that——

'The term 'railroad' as used in this act shall include all bridges and ferries used or operated in connection with any railroad, and also all the road in use by any corporation operating a railroad, whether owned or operated under a contract, agreement, or lease; and the term 'transportation' shall include all instrumentalities of shipment or carriage.'

The word 'transportation' is the crucial word, and its definition in the amendment of 1906 is as follows:

'. . . and the term 'transportation' shall include cars and other vehicles and all instrumentalities and facilities of shipment or carriage, irrespective of ownership or of any contract, express or implied, for the use thereof and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported; and it shall be the duty of every carrier subject to the provisions of this act to provide and furnish such transportation upon reasonable request therefor. . . .' And this, it is contended, must be read in connection with § 12 as amended March 2, 1889, as follows:

'. . . and the Commission is hereby authorized and required to execute and enforce the provisions of this act.' (25 Stat. at L. 855, 858, chap. 382, Comp. Stat. 1913, §§ 8569, 8576.)

Section 1 of the Act of 1887 came before the Commission for consideration, and the duty thereunder of carriers to furnish tank cars for the transportation of petroleum, in Scofield v. Lake Shore & M. S. R. Co. 2 I. C. C. Rep. 90, 2 Inters. Com. Rep. 67. The opinion is too long to review. It is enough to say of it that it considered the conditions of the oil trade, the different methods of shipping oil in barrels and in tank cars, and stated that the latter method had become established, though...