Chicago, Milwaukee, & St. Paul Railway Company v. Iowa/Opinion of the Court

This suit was brought by the state of Iowa to obtain a mandatory injunction requiring the Chicago, Milwaukee, & St. Paul Railway Company to comply with an order of the State Railroad Commission promulgated December 22, 1909. The defendant answered, denying the validity of the order, and also filed a cross petition to set it aside, alleging that it was repugnant to the Constitution of the United States, as an attempt to regulate interstate commerce and to deprive the company of its property without due process of law, and, further, that the Commission was without authority under the laws of the state to make the order. Judgment, sustaining the action of the Commission and directing compliance, was affirmed by the supreme court of the state. 152 Iowa, 317, 130 N. W. 802.

It appeared that the railway company, in 1909, had refused to accept shipments of coal in carload lots at Davenport, Iowa, for points in that state when tendered in cars of other railroad companies by which the coal had been brought to Davenport from points in Illinois. The railway company insisted that it was entitled to furnish its own cars. The Clark Coal & Coke Company, operating a branch at Davenport, complained of this rule to the Railroad Commission, stating that it was a departure from the practice which had obtained for several years with respect to such shipments, that the Clark Company paid all charges to Davenport, and on receiving orders from its customers tendered written billing for transportation from Davenport to the designated points, and that it was unreasonable for the railway company to require in such cases that the coal should be unloaded and reloaded in its own cars. A hearing was had before the Commission at which other shippers intervened, adopting the coal company's complaint. The facts were presented in an agreed statement, as follows:

'The Clark Coal & Coke Company of Davenport, Iowa, have been making shipments of coal from points in Illinois to Davenport by the Chicago, Rock Island, & Pacific Railway Company and the Chicago, Burlington, & Quincy Railroad Company; that said coal is then placed by the railroad bringing it into Iowa on an interchange track at Davenport; that all charges from point of origin in Illinois to Davenport, Iowa, are paid by the Clark Coal & Coke Company to the railroad company bringing said coal; that thereupon complainant has notified the respondent railway company of the placement of said coal, and that it desired to ship said coal by the respondent railway company to different points on its own line, and tendered a written billing from Davenport to the point so designated; that thereupon respondent railway company has accepted said billing from Davenport to said point, and taken said cars from said interchange track to its own line, and transported the same in accordance with said written billing; that the respondent railway company has changed its method of doing business in the above respects by its printed order, and now refuses to accept said written billing and take said cars from said interchange track and transport them over its own line to the point designated by said billing, unless said coal is loaded in equipment belonging to respondent railway company. Respondent railway company, by its answer to the complaint, alleges that it 'will furnish cars for shipment of coal from Davenport to any point in Iowa, as provided by Iowa Distance Tariff, but will not accept shipments originating at Davenport, billed from Davenport, in the equipment of other carriers,' and its readiness and ability to furnish cars of its own for shipment is not controverted and will therefore be taken to be true. It will thus be observed that before the respondent railway company will take coal for transportation on its own line, in equipment other than its own, it requires that the same shall be unloaded and reloaded into its own cars.'

Thereupon, the Commission rendered a decision in favor of the shipper and entered the following order, to which this controversy relates:

'In accordance with the conclusions heretofore expressed, it is therefore ordered by the Board of Railroad Commissioners of Iowa that upon arrival of loaded cars of coal at the city of Davenport, upon any line of railroad, when said cars are placed upon the interchange track at Davenport, as ordered or requested by the owner or consignee of said cars, and the freight paid thereon, and the ordinary billing in use by the respondent railway is tendered to it for a billing of said cars so placed to a point on its own line within the state of Iowa, that the respondent railway company be and is hereby ordered and required to accept said billing, receive said car or cars so billed, and transport them on its own line to the point designated by the owner or consignee in said billing; and that it receive said car or cars in whatever equipment the same may be loaded, without requiring an unloading and reloading into its own equipment, and transport said car or cars over its own line to points within this so loaded, without unloading and reloading as above set forth, in the same manner that it receives cars from connecting lines, loaded in its own equipment. It is expressly understood, however, in this order, that no questions in relation to switching charges are determined.'

The railway company contended, both before the Commission and in the state court, that the shipments in question were interstate; and it was alleged in its answer that the method of transportation resorted to was a device of shippers to secure, by adding the rate from the initial point in Illinois to Davenport to the rate established by the Iowa distance tariff from Davenport to other points in the state, a lower rate than that applicable to an interstate shipment from the point in Illinois to the point of final destination.

The Railroad Commission held that the transportation desired from Davenport was a purely intrastate service, saying: 'Under the admitted facts, the city of Davenport became a distributing point for coal shipped by the consignor. The certainty in regard to the shipments of coal ended at Davenport. The point where the same was to be shipped beyond Davenport, if at all, was determined after the arrival of the coal at Davenport. The coal was under the control of the consignee, and he could sell it in transit or at Davenport, or reconsign it to a point on respondent's railway, or any other railway, at his own discretion.' Upon the trial of the present suit in the state court, the state introduced in evidence the proceedings, decision, and order of the Commission, and without further evidence both parties rested. The supreme court of the state took the same view of the facts that the Commission had taken, and accordingly held that the shipments were intrastate. The court said that the facts showed that the coal was originally consigned to the coal company in Davenport, that it was there held until sales were made, that the consignee had taken delivery, paying the freight to the initial carrier, and assuming full control. 152 Iowa, 317, 319, 130, N. W. 802.

The record discloses no ground for assailing this finding. It is undoubtedly true that the question whether commerce is interstate or intrastate must be determined by the essential character of the commerce, and not by mere billing or forms of contract. Railroad Commission v. Worthington, 225 U.S. 101, 56 L. ed. 1004, 32 Sup. Ct. Rep. 653; Texas & N. O. R. Co. v. Sabine Tram Co. 227 U.S. 111, 57 L. ed. 442, 33 Sup. Ct. Rep. 229; Railroad Commission v. Texas & P. R. Co. 229 U.S. 336, 57 L. ed. 1215, 33 Sup. Ct. Rep. 837. But the fact that commodities received on interstate shipments are reshipped by the consignees, in the cars in which they are received, to other points of destination, does not necessarily establish a continuity of movement, or prevent the reshipment to a point within the same state from having an independent and intrastate character. Gulf, C. & S. F. R. Co. v. Texas, 204 U.S. 403, 51 L. ed. 540, 27 Sup. Ct. Rep. 360; Railroad Commission v. Worthington, 225 U.S. 101, 109, 56 L. ed. 1004, 1008, 32 Sup. Ct. Rep. 653; Texas & N. O. R. Co. v. Sabine Tram Co. 227 U.S. 111, 129, 130, 57 L. ed. 442, 449, 450, 33 Sup. Ct. Rep. 229. The question is with respect to the nature of the actual movement in the particular case; and we are unable to say upon this record that the state court has improperly characterized the traffic in question here. In the light of its decision, the order of the Commission must be taken as referring solely to intrastate transportation originating at Davenport.

In this view, the validity of the Commission's order is challenged upon the ground that at common law the carrier was entitled to use its own equipment, and that the statute of the state of Iowa as to the receiving of cars from connecting carriers (Code, § 2116) is inapplicable for the reason that, with respect to the transportation in question, the plaintiff in error was the initial carrier. But the obvious answer is that what is required by the law of Iowa has been determined by the supreme court of that state. That court, examining the various provisions of the Iowa Code which have relation to the matter, has held that the order was within the aughority of the Railroad Commission. 152 Iowa, 317, 320, 321, 130 N. W. 802.

Further, the plaintiff in error insists that the enforcement of the order would deprive it of its liberty to contract, and of its property, without due process of law, and would deny to it the equal protection of the laws, in violation of the 14th Amendment. We find these objections to be without merit. It was competent for the state, acting within its jurisdiction, and not in hostility to any Federal regulation of interstate commerce, to compel the carrier to accept cars which were already loaded and in suitable condition for transportation over its line. The requirement was a reasonable one. It cannot be said that the plaintiff in error had a constitutional right to burden trade by insisting that the commodities should be unloaded and reloaded in its own equipment. Upon this point the case of Wisconsin, M. & P. R. Co. v. Jacobson, 179 U.S. 287, 45 L. ed. 194, 21 Sup. Ct. Rep. 115, is decisive. There is no essential difference, so far as the power of the state is concerned, between such an order as we have here and one compelling the carrier to make track connections, and to receive cars from connecting roads, in order that reasonably adequate facilities for traffic may be provided. See also Minneapolis & St. L. R. Co. v. Minnesota, 186 U.S. 257, 263, 46 L. ed. 1151, 1156, 22 Sup. Ct. Rep. 900; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U.S. 1, 19, 27, 51 L. ed. 933, 941, 945, 27 Sup. Ct. Rep. 585, 11 Ann. Cas. 398; Missouri P. R. Co. v. Kansas, 216 U.S. 262, 54 L. ed. 472, 30 Sup. Ct. Rep. 330; Grand Trunk R. Co. v. Michigan Railroad Commission, 231 U.S. 457, 468, 58 L. ed. --, 34 Sup. Ct. Rep. 152.

It is argued that it was unreasonable to subject the railway company to the expense incident to the use of the cars of another carrier when it was ready to furnish its own. The record affords no sufficient basis for this contention. What the expense referred to would be was not proved, and, in the absence of a suitable disclosure of the pertinent facts, no case was made which would justify the conslusion that, in its practical operation, the regulation would impose any unreasonable burden. On the other hand, the agreed statement makes it evident that prior to the change which gave rise to this controversy it was the practice of the company to accept such shipments.

Finally, it is said that the order of the Commission interferes with interstate commerce because the cars in question were the vehicles of that commerce, and were brought into the state as such. No question, however, is presented here as between the shippers and the owners of the cars, and no actual interference with interstate commerce is shown. Nor does it appear that any regulation under Federal authority has been violated.

The plaintiff in error has failed to establish any ground for invalidating the order of the Commission and the judgment must be affirmed.

Affirmed.