United States v. Union Stockyard & Transit Co. of Chicago

• Decision Date: 14 November 1911
• Docket Number: 15.
• Citation: 192 F. 330
• Parties: UNITED STATES ex rel. ATTORNEY GENERAL v. UNION STOCKYARD & TRANSIT CO. OF CHICAGO et al.
• Court: United States Commerce Court

192 F. 330

UNITED STATES ex rel. ATTORNEY GENERAL v. UNION STOCKYARD & TRANSIT CO. OF CHICAGO et al.

No. 15.

Commerce Court.

November 14, 1911

On Petition for Rehearing, February 13, 1912. [Copyrighted Material Omitted]

Blackburn Esterline and William E. Lamb, Sp. Asst. Attys. Gen (James A Fowler, Asst. Atty. Gen., on the brief), for the United States.

Ralph M. Shaw (John Barton Payne and Silas H. Strawn, on the brief), for Union Stockyard & Transit Co. of Chicago and Chicago Junction Ry. Co.

W. D Guthrie for Chicago Junction Railways & Union Stockyards Co.

Willard M. McEwen, for Louis Pfaelzer & Sons.

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

MACK Judge.

This proceeding is brought to compel the Union Stockyard & Transit Company of Chicago (hereinafter called the 'Stockyard Co.') and the Chicago Junction Railway Company (hereinafter called the 'Junction Co.') to file with the Interstate Commerce Commission tariffs in conformity with section 6, and reports and statements in conformity with section 20, of the act to regulate commerce (Act Feb. 4, 1887, as amended June 29, 1906 (34 Stat. 586, 593)), and of the rules and regulations adopted by the Commission pursuant thereto, and to enjoin the Stockyard Co. and the individual defendants comprising the firm of Louis Pfaelzer & Sons (hereinafter called 'the Pfaelzers') from carrying out the terms and provisions of a contract made by them, and the Chicago Junction Railways & Union Stockyards Company (hereinafter called the 'Investment Co.') from carrying out its written guaranty of this contract.

The case has been heard on petition and answer. While the answers of the Stockyard Co. and the Investment Co. neither admit nor deny certain allegations as to the activities of the Junction Co., which the latter in its answer admits to be true, and while no testimony has been offered in the case, it has been presented, both in the briefs and oral arguments by all counsel, on the basis of the truth of those allegations that are so confessed by the Junction Co. We have, therefore, considered the petition, as against each defendant, in this light.

Although the petition is clearly multifarious in joining mandamus proceedings, authorized by the act to regulate commerce, to secure compliance with its provisions, and injunction proceedings, authorized by section 3 of the act to further regulate commerce, known as the 'Elkins Act' (Act Feb. 19, 1903, 32 Stat. 848), to restrain an alleged illegal rebate and discrimination, inasmuch as defendants do not raise this objection, we shall, without approving such practice, proceed to a determination of the petitioner's rights under both aspects of the case.

The Stockyard Co., a corporation organized in 1865 by a special, but public, act of the state of Illinois, was thereby authorized, not only to maintain stockyards and a hotel, but also to construct and maintain railway lines, tracks, and switches, so as to connect its yards, then outside of the city of Chicago, with the tracks of all railroad lines entering Chicago within prescribed limits; to maintain the railroad, and to transport and allow to be transported thereon, between such railroads themselves, as well as between its yards and such railroads, property of every kind; to fix the rates of toll, provided 'all fees and charges for freight * * * shall be subject to any general law * * * in reference * * * to railroads. ' It was further authorized to maintain its lines of railway across public streets and highways, and was given power of condemnation. The act provided that nothing therein contained should be construed as giving authority to maintain or operate a railroad for the conveyance of passengers or freight in the city of Chicago; but since 1865, the date of the charter, the city of Chicago has been extended so as to cover all of the property of the Stockyard Co.

It was further authorized by the charter to lease its property. Pursuant to this authority, it entered into an agreement with the Junction Co., a corporation organized under the general railroad act of the state of Illinois, whereby, in 1897, it, in effect, leased to the Junction Co. all of its railroad and railroad equipment for a term of 50 years. Under the agreement the Junction Co. obligated itself to conduct, operate, and manage the property; to perform all duties pertaining to a railroad, or of a railroad character, imposed upon the Stockyard Co.; and to pay, as rental, two-thirds of the entire net earnings and revenue derived by it from the operation of all its lines of railroad and railroad track. The Junction Co. further obligated itself to submit its books and papers showing its operations to the nominee of the Stockyard Co.

The Junction Co., at the time of the lease and for 10 years thereafter, was the owner of other railroad property, and was concededly a common carrier, within the act to regulate commerce. In 1907, however, it sold all of its other property. Since that time its sole business has been the operation of the railroad so acquired from the Stockyard Co., lying wholly within the state of Illinois, in substantially the same manner as it had been operated, prior to the lease, by the Stockyard Co.

The line of road consists of certain main tracks, running east and west from a point on the lake front in the city of Chicago near the intersection of Thirty-Ninth street with the tracks of the Illinois Central Railroad, and thence in a general westerly and northwesterly direction to a point some 8 1/4 miles distant from the lake, all in the state of Illinois; its parallel main tracks between these points aggregating about 40 miles. The Union Stockyards are located about 2 miles from the lake front, and, in addition to connecting with these yards, the Junction Co. also has switch tracks to other industries located at or near there, aggregating some 250 miles, by means of which main and switch tracks it serves in the neighborhood of 650 industries; all being in or near what is known as the 'stockyards district' of Chicago.

According to the record in this case, the Junction Co. neither receives goods for carriage on its own account nor deals on its own account with shippers or consignees. It is not necessary for the purposes of this decision to enumerate all of its activities in the operation of the road. Among them is the hauling of loaded cars on behalf of trunk line carriers, by whom it is employed and paid, from such trunk lines to the industries on its tracks, or to other trunk lines connecting with it. These cars are brought by the trunk line carriers from points outside of the state destined to points in the district served by it or to points outside of the state. They are placed by the incoming trunk line roads on what are known as the 'receiving tracks' of the Junction Co.; each car being marked with a transfer card, giving the name of the consignee of the freight therein contained, and thus indicating its destination. The Junction Co. picks them up with its own motive power and transports and delivers either to the designated consignee or industry on its line, or, when destined to points beyond the state limits, to the proper outgoing trunk line. These cars are transported in one unbroken line of railroad carriage from the several points where they originate outside of the state, over the line of the Junction Co. after their arrival at Chicago, to the railroad of the outgoing connecting carrier, and then to their points of destination outside of the state. This is done without the intervention of the shipper or consignee, or the performance by either of them of any intermediate act or service; and they move in this way on through bills of lading, covering the whole distance traversed, as do those also which are consigned and delivered to consignees and industries on the line of the Junction Co. in the stockyards district.

For the hauling or so-called switching service so rendered, the Junction Co. is paid by the trunk line carriers which request the service a specified sum according to an established schedule of tariffs or charges. For instance, for the switching of cars back and forth to and from the receiving tracks of the various connecting trunk lines to the stockyards, or to the industries in that vicinity, the Junction Co. is paid a certain sum per car by the trunk line carriers, and this it receives as a distinct switching charge, regardless of the commodity or character of freight in the car, its origin, destination, or the through freight charge of the trunk line carriers. No specific charge therefor is made to the shipper or consignee, either by the Junction Co. or by the trunk line company. The trunk line is said to absorb the charge.

Since the lease of 1897, the Stockyard Co. has had nothing whatever to do with the railroad or railroad business, which has been carried on exclusively by its lessee. It has confined itself apart from the operation of the hotel, to conducting a stockyards business, with all which this involves and implies. It is not a dealer in cattle, but simply maintains a public market, where all kinds of live stock can be bought and sold. As part of this business it receives and cares for stock delivered by trunk line carriers at its docks and chutes, unloading them for a specific amount per car paid to it by the carriers. The stock, so unloaded at its yards, is mostly stock consigned on through bills of lading to parties doing business in and around the stockyards or stockyards district, which has been transported by the carriers from points outside of the state to the stockyards or to points on the line of the Junction Co. It also loads onto cars furnished by the trunk line carriers stock outbound from the...