Texas Railway Company v. Interstate Commerce Commission

[Syllabus from pages 197-199 intentionally omitted]

This is an appeal from a decree of the United States circuit court of appeals for the Second circuit (6 C. C. A. 653, 57 Fed. 948), affirming a decree of the circuit court of the United States for the Southern district of New York, filed October 5, 1892 (52 Fed. 187).

The original bill of complaint was brought by the interstate commerce commission, created by virtue of an act of congress, entitled 'An act to regulate commerce,' approved February 4, 1887, as amended by an act approved February 10, 1891, against the Texas & Pacific Railway Company, a corporation chartered and existing under and by virtue of the laws of the United States, having its principal office at New York City.

The object of the bill was to compel the defendant company to obey an order of the interstate commerce commission, made on January 29, 1891, whereby the said defendant was ordered to 'forthwith cease and desist from carrying any article of imported traffic shipped from any foreign port through any port of entry of the United States, or any port of entry in a foreign country adjacent to the United States, upon through bills of lading destined to any place within the United States, at any other than upon the inland tariff covering other freight from such port of entry to such place of destination, or at any other than the same rates established in such inland tariff for the carriage of other like kind of freight, in the elements of bulk, weight, value, and expense of carriage'; and which order the said defendant was alleged to have wholly disregarded and set at naught.

It appears, by the bill, that on March 23, 1889, the commission, of its own motion and without a hearing of the parties to be affected, had made a certain order wherein, among other things, it was provided as follows:

'Imported traffic transported to any place in the United States from a port of entry or place of reception, whether in this country or in an adjacent foreign country, is required to be taken on the inland tariff governing other freights.' 2 Interst. Commerce Com. R. 658.

Subsequently complaint was made to the interstate commerce commission, in a petition filed by the New York Board of Trade and Transportation, that certain railroad companies were disregarding said order, and, in violation of the act to regulate commerce, were guilty of unjust discrimination, in that they were in the habit of charging the regular tariff rates upon property when delivered to them at New York and Philadelphia for transportation to Chicago and other Western points, while charging other persons rates which were lower and even 50 per cent. thereof for a like and contemporaneous service under substantially similar circumstances and conditions, when the property was delivered to them at New York or Philadelphia by vessel or steamship lines, under through bills of lading from foreign ports and foreign interior points, issued under an arrangement between the said railroad companies and such vessels and steamship lines and foreign railroads, for the continuous carriage at joint rates from the point or port of shipment to Chicago and other Western points, the railroad companies' share of each through rate being lower than their regular tariff rates.

The Commercial Exchange of Philadelphia and the San Francisco Chamber of Commerce intervened, and became parties complainant also.

The companies first warned and called upon to answer the complainant were the Pennsylvania Railroad Company, the Pittsburgh, Ft. Wayne & Chicago Railway Company, and the Pittsburgh, Cincinnati, & St. Louis Railway Company; but, after the coming in of the answers of said companies, it was deemed necessary to make quite a number of other railroad companies parties defendant,-among them the Texas & Pacific Railway Company, the defendant in the present case, and the Southern Pacific Company. The several defendant companies filed answers. The answer of the Texas & Pacific Railway Company, admitting that, both before and since March 23, 1889, it had carried imported traffic at lower rates than it contemporaneously charged for like traffic originating in the United States, justified by claiming that through shipments from a foreign country to the interior of the United States differ in circumstances and conditions from shipments originating at the American seaboard bound for the same interior points, and that defendant company has a legal right to accept for its share of the through rate a lower sum than it receives for domestic shipment to the same destination from the point at which the imported traffic enters this country.

The result of the hearing before the interstate commerce commission was, so far as the present case is concerned, that the commission held that the Texas & Pacific Railway Company was not justified in accepting, as its share of a through rate on imported traffic, a less charge or sum than it charged and received for inland traffic between the port of reception and the point of delivery, and the said order of January 29, 1891, commanding that said company desist from distinguishing in its charges between foreign and inland traffic, was made. 4 Interst. Commerce Com. R. 447.

As the Texas & Pacific Railway Company declined to observe said order, the commission filed its present bill against said company in the circuit court of the United States for the Southern district of New York.

The railway company filed a plea in abatement, denying that its principal office was in the Southern district of New York, and denying that it had violated or disobeyed the order of the commission within the state of New York, or at any place within the jurisdiction of the circuit court. Certain affidavits were filed, upon a stipulation, as to the facts, and, after hearing, the plea was overruled, and also a motion to dismiss the proceedings for want of jurisdiction was denied, and to these rulings exceptions were taken and allowed.

The defendant compa y answered, alleging that the interstate commerce commission was not a corporation, person, or body politic, capable of bringing or maintaining this suit; that the petition or bill failed to allege or show any facts constituting a violation by the defendant of the order of January 29, 1891, and did not show or allege any specific act or acts by the defendant in violation of the act of congress; that the Southern Pacific Company, as participant with the defendant in the making and division of the through rates, was a necessary party; and that the bill should be dismissed for want of such necessary party.

The answer, admitting that the company had charged and received, since January 29, 1891, rates for the transportation of commodities from Liverpool and London, England, via New Orleans and the Texas & Pacific Railway and the Southern Pacific Company, to San Francisco, Cal., different from the rates charged and received for the transportation of inland commodities from New Orleans by the same route to San Francisco, asserted that it had a legal right so to do, and that such action was not in violation of the act of congress regulating commerce, or of any valid order of the interstate commerce commission. The answer sets up a number of facts which it alleged sustained its defense.

The cause was heard upon the petition, answer, and sundry exhibits, and resulted in a decree declaring that the order of January 29, 1891, was lawful, and that the same had been disobeyed by the defendant, and enjoining the defendant from further continuing such disobedience of said order. An appeal, with errors assigned, was taken from this decree to the circuit court of appeals of the Second circuit, by which, on June 3, 1893, the decree of the circuit court (52 Fed. 187) was affirmed with costs. 20 U.S. App. 1, 6 C. C. A. 653, 57 Fed. 948. An appeal was then taken, on errors assigned, from said decree to this court.

John F. Dillon and Ed. Baxter, for appellant.

Simon Sterne and J. D. Kernan, for appellee.

Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.