Icc v. Detroit, G.H & M. Ry. Co., 167 U.S. 633 (1897)

Interstate Commerce Commission v. Detroit,

Grand Haven and Milwaukee Railway Company
No. 539

Argued March 16, 1897
Decided May 24, 1897
167 U.S. 633

APPEAL FROM THE COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

A railroad engaged in interstate commerce does not violate the provisions of §§ 4 and 6 of the Interstate Commerce Act, by furnishing cartage for delivery free of charge to the merchants of one town on its line and not furnishing similar service to the merchants of another town on its line thirty-three miles distant, nor by failing to publish such free cartage in the schedule published in the first town, when such privilege has been openly and notoriously enjoyed for twenty-five years.

The fourth section of that act has in view only the transportation of passengers and property by rail, and when property transported as interstate commerce reaches its destination by rail at lawful rates, having regard to rates charged upon similar transportation to other points on the line, it does not concern the Interstate Commerce Commission whether the goods, after arrival, are carried to their place of deposit in vehicles furnished by the railway company free of charge or in vehicles furnished by the owners of goods, and the same rule applies to the transportation of passengers.

In matters of this kind, much should be left to the judgment of the Commission, and, should it direct by a general order that railway companies should thereafter regard cartage, when furnished free, as one of the terminal charges, and include it as such in their schedules, such an order might be regarded as a reasonable exercise of the Commission’s powers.

The Detroit, Grand Haven and Milwaukee Railway Company, a corporation of the State of Michigan, operates a railroad wholly within that state, running westwardly from Detroit to Grand Haven. In connection with Eastern roads, it is engaged in interstate commerce. Upon its line are the Cities of Ionia and Grand Rapids, distant 124 and 157 1/2 miles from Detroit, respectively. It has an established tariff of freight rates to these points from New York, Philadelphia, and other points east of Detroit.

On September 18, 1888, Stone & Carten, retail merchants at Ionia, filed a petition before the Interstate Commerce Commission complaining that said railroad company was unduly discriminating against Ionia and preferring Grand Rapids, in violation of certain provisions of the Interstate Commerce Act. The company filed an answer, and the case was heard upon a written stipulation of facts, which constituted the sole evidence on which the case was submitted to the Commission for decision.

The facts found by the Commission were as follows:

1. The complainants are co-partners doing business under the firm name of Stone & Carten, and are engaged in the sale at retail of goods, wares, and merchandise in the City of Ionia, County of Ionia, and State of Michigan, purchasing said goods, wares, and merchandise at Philadelphia, Pa. New York, N.Y., Boston, Mass., and points east of Detroit, Michigan.

2. That the respondent railway company is a corporation existing under and pursuant to the laws of the State of Michigan, and is a common carrier of passengers and property for hire between the City of Detroit and the City of Grand Haven, both of said places and its entire line of railroad being in the State of Michigan, but it does not own and control a line of steamboats plying across Lake Michigan between Grand Haven and Milwaukee, Wisconsin, but there is a line of steamboats engaged in the transportation of persons and property across Lake Michigan between Grand Haven and Milwaukee, from which the respondent receives traffic consigned over its road from Milwaukee, and to which it delivers traffic from its road destined to Milwaukee. That all of said boats are under the control and direction of an independent corporation, organized under the laws of the State of Michigan, by the name of the Grand Haven and Milwaukee Transportation Company. That the management of the business of the last-named company is under the management and control of the same officers as those which manage and control the road and business of the respondent.

3. The respondent, for its services as a common carrier for continuous shipment, under a common arrangement, of property from Detroit to its stations on its line of transportation, established and published a schedule of rates and charges, a tariff of freights which makes on all freights from Philadelphia, New York, and Boston, and all other points east of Detroit, consigned over the respondent’s road, the same rates and charges for the complainants which are made and charged for the same class of freights to the merchants doing business at the City of Grand Rapids; a copy of which schedule or tariff is hereto annexed, and made and deemed a part of this stipulation.

4. The shipments of freight from Philadelphia, New York, Boston, and points east of Detroit, which are delivered to the respondent’s road at said City of Detroit and transported by it over its line of railway, pass through the City of Ionia before reaching the City of Grand Rapids. That it is a shorter distance from Detroit to Ionia than from Detroit to Grand Rapids, and over the same line, in the same direction, the shorter being included in the longer distance.

5. That the respondent provides at its own expense, drays, carts, and trucks at the City of Grand Rapids, for the service of transporting merchandise and freight generally, as well as merchandise and freight consigned from Philadelphia, New York, Boston, and points east of Detroit between its station at Grand Rapids and the places of business of merchants, traders, and other patrons of its road at that place, which service it performs without additional charge to the owner or shipper of property on account thereof. That this service is not furnished to complainants, or other merchants, traders, and patrons of its road at the City of Ionia. That this service at Grand Rapids has been openly and notoriously rendered for a long period of time, to-wit, for twenty-five years and upwards. That its station at the said City of Grand Rapids is within the corporate limits thereof, and is, on an average, one and a quarter miles from the business sections of said city where the traffic of the places tributary to respondent’s road originates and terminates, while respondent’s station for receiving and discharging freight and property at the City of Ionia is not to exceed an eighth of mile from the business center of said city. That at the City of Grand Rapids, there are two other railroads, the Michigan Central Railroad and the Grand Rapids, Lansing and Detroit [Detroit, Lansing and Northern?] Railroad, both of which are immediately and directly in competition with respondent’s road for the business of Grand Rapids. That the stations of both of said roads for receiving and discharging freight and property at Grand Rapids are near the business center of said city, requiring only short haul to and from their stations, on an average about one-quarter of a mile. That respondent did the carting of freight to and from its station at Grand Rapids substantially in the same manner as at present long prior to the time when either said Michigan Central or Grand Rapids, Lansing, and Detroit Railroads constructed to that place.

6. That the actual cost of carting or draying freight from respondent’s warehouse in the said City of Ionia to the several places in said City of Ionia to and from which traffic has to be hauled is two cents per hundredweight. That the cost of carting or draying freight transported over respondent’s line to and from the places of business of the merchants, traders, and other patrons of its road at Grand Rapids is two cents per hundredweight.

7. That there is but slight competition encountered by the complainants and other persons, firms, and corporations engaged in business at the City of Ionia interested in shipping over respondent’s road, with similar business at the City of Grand Rapids.

9. That complainants have not brought any suit for the recovery of money or damage for which the respondent is alleged to be liable under the provisions of the Act to Regulate Commerce, but have elected to adopt this procedure as the sole means of obtaining relief.

10. The City of Grand Rapids has a population of about 70,000. The City of Ionia has a population of about 6,000. The freight traffic to and from Grand Rapids by all roads in 1887 amounted to 985,685 tons. The freight traffic to and from Ionia by all roads for the same time amounted to about 55,000 tons.

11. Cartage by railway companies in similar manner to that at Grand Rapids is conducted by other railway companies at exceptional stations in the State of Michigan, and more or less extensively practiced by companies in other states at exceptional stations.

On April 26, 1890, the Commission decided the case, which is reported in 3 I.C.C. 113, and made the following order:

It is ordered and adjudged that the defendant, the Detroit, Grand Haven and Milwaukee Railway Company, be and it is hereby required, within thirty days from and after the service of a copy of the report and opinion in this proceeding and of this order, to wholly cease and desist from furnishing free cartage of freights at Grand Rapids, in the State of Michigan, whereby rebates from its lawfully published schedule of rates, fares, and charges at its station or office in Grand Rapids are given to shippers and consignees, and charges for the transportation over its line of property shipped from Eastern points to Grand Rapids, aforesaid, are made less than charges for the transportation over its line of like kinds of property shipped from the same Eastern points to Ionia, in the State of Michigan.

On November 2, 1891, the Commission, having been informed that the company would not comply with the order until the judgment of the Commission should be judicially confirmed, filed a petition in the Circuit Court of the United States for the Western District of Michigan seeking to enforce the order. To this an answer was filed by the company, admitting the facts to be as found by the Commission and alleging certain additional facts, to support which testimony was adduced.

The circuit court on August 7, 1894, entered a decree in the following terms:

It is hereby ordered, adjudged, and decreed that the mandatory writ of injunction of this court do issue to said respondent, the Detroit, Grand Haven and Milwaukee Railway Company, commanding it and its officers and agents to forthwith desist and refrain from affording free cartage at said City of Grand Rapids unless a like service, or its equivalent in value by reduced rates, be at the same time afforded at said City of Ionia and unless the fact that such free cartage, or such equivalent reduced rate afforded at both points, shall be noted on the established tariffs of freights and charges published as required by law.

Interstate Commerce Commission v. Detroit &c. Railway, 57 F. 1005.

From this decree an appeal was taken to the Circuit Court of Appeals for the Sixth Circuit, and that court, on April 14, 1896, entered a decree reversing the decree of the circuit court and directing the dismissal of the Commission’s petition. And from the decree of the circuit court of appeals an appeal was taken and allowed to this Court.