Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422 (1940)

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Tank Car Corp. v. El Dorado Terminal Co.

No. 129

Argued December 12, 13, 1939
Decided January 2, 1940
308 U.S. 422

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

A car company leased, on a monthly rental basis, tank cars to a shipper for the transportation of the latter’s products in interstate commerce, the contract providing that tariff car mileage allowances from railroads for the use of the cars should be collected by the car company and be credited monthly to the rental account of the shipper. The tariffs contained no provision for payment of such allowances directly to the shipper, and, under the carriers’ rules, they were paid in this case to the car company. The car company subsequently refused to pay to the shipper any excess of car-mileage allowances over the stipulated rents, on the ground that it would thus be participating in illegal rebating. The shipper thereupon brought suit in assumpsit upon the lease to recover the amount of such excess.

Held:

1. The suit was within the jurisdiction of the District Court, since the action was an ordinary one in assumpsit on a written contract and the court had jurisdiction of the parties. P. 432.

2. Upon disclosure of the terms and operation of the lease contract, the court should not have proceeded to adjudicate the rights and liabilities of the parties in the absence of a decision by the Interstate Commerce Commission with respect to the validity under the Interstate Commerce Act of the practice involved. P. 428.

The shipper furnished the cars, and was entitled, under § 15(13) of the Interstate Commerce Act, to a reasonable allowance therefor. No rule or regulation of the carrier may provide for the payment of such allowance to any other person. That the car company acted merely as collecting agent for the shipper does not take the case out of the jurisdiction of the Commission. The inquiry into the lawfulness of the practice under the lease is peculiarly within the competence of the Commission.

3. The cause should not be dismissed, but should be held pending the conclusion of an appropriate administrative proceeding, thus saving to the defendant any defenses which it may have. P. 433.

104 F.2d 903, 916, reversed.

Certiorari, post, p. 533, to review the reversal of a judgment for the petitioner in a suit brought by the respondent upon a contract of lease.