Chicago, Burlington & Quincy Railroad v. Herman Bros.

82 N.W.2d 395, 164 Neb. 247, 1957 Neb. LEXIS 138
Nebraska Supreme Court·Decided April 12, 1957·No. 34040·Published·Cited by 9 cases

Opinion

Messmore,, J.

This is an appeal from an order of the Nebraska State Railway Commission, hereinafter called the commission, in which the commission approved and allowed to become effective certain proposed rail rates governing the transportation of petroleum and petroleum products from points of origin in the State of Nebraska to points of destination in this state, when such traffic moves in intrastate commerce. The appeal was perfected by Herman Bros., Inc., and other highway motor carriers who filed a protest and request for formal hearing in opposition to an application filed with the commission by the Chicago, Burlington & Quincy Railroad Company and other railroad companies carrying such products as freight.

On November 21, 1955, the appellees made application in writing to the commission requesting permission to *249 establish, effective December 1, 1955, intrastate in Nebraska, rates on petroleum and its products published in tariff 448. The proposed rates were based generally 1% cents per 100 pounds less than truck rates for distances of 75 miles and more, and on truck rates for less than 75 miles, except when present rail rates were lower than present truck rates, such rail rates were to be maintained.

On November 23, 1955, the appellants filed a pleading titled “Protest and Request for Formal Hearing” before the commission, in which the appellants alleged that the proposed rates were unreasonably low, were noncompensatory, unlawfully prejudiced the appellants and deprived them of traffic to which they were rightfully entitled, and would not foster sound economic conditions in motor transportation. The prayer was that the application be denied.

■ On December 28, 1955, the matter came on for hearing before the commission upon the application of appellees and the protest of the appellants, and hearing was had to the commission.

On December 30, 1955, the commission entered its order granting the appellees, which were all Nebraska railroads, namely: Chicago- and North Western Railway Company; Chicago, Burlington & Quincy Railroad Company; Chicago, Rock Island and Pacific Railroad Company; Chicago, Saint Paul, Minneapolis and Omaha Railway Company; Missouri Pacific Railroad Corporation in Nebraska; and Union Pacific Railroad Company, authority to apply the rates, rules, and charges as set forth in Western Trunk Line Tariff 448 regarding shipments of petroleum and petroleum products moving in Nebraska intrastate traffic. It was further ordered that an emergency existed, and the said order should become effective January 1, 1956.

On January 11, 1956, appellants filed a motion for rehearing. On March 12, 1956, the commission issued its order overruling the motion for rehearing. From *250 the order overruling the motion for rehearing, appeal was taken by the protestants to this court.

The record discloses that on or about October 20, 1955, the appellees, with other western trunk line rail carriers, filed with the Interstate Commerce Commission freight tariff 448 naming specific carload rates in cents per 100 pounds from 14 rail shipping points in Kansas, Iowa, Nebraska, Missouri, and Minnesota to all rail stations in Nebraska for the rail transportation in tank cars of petroleum oil and its products, to become effective December 1, 1955.

The rates proposed for Nebraska intrastate rail carriage are those set forth in tariff 448, and are the same rates that were made effective by that tariff on interstate traffic on December 1, 1955. The Nebraska rail shipping points from which rates were proposed were Omaha, Superior, Doniphan, Scottsbluff, and South Omaha, where, except at South Omaha, pipe-line terminals or refineries are located.

The rates shown in tariff 448 are generally 1% cents per 100 pounds less than truck rates on gasoline for distances of 75 miles and over. For distances under 75 miles, the rates are the same as the truck rates, except in cases where the existing rail rate was already lower than the truck rate, then the existing rail rate was not changed. The proposed rates were not subject to current Ex Parte 175 increases, except the rates from Omaha and South Omaha. The rates from other points like Doniphan, Superior, and Scottsbluff were not made subject to that increase because the appellees were trying to meet truck competition and the trucks do not have any Ex Parte 175 increases on their rates. The proposed rates constitute reductions from existing rail rates.

Official motor vehicle truck tariff No. 5 was used in ascertaining the truck rates. That tariff states rates in cents per gallon, and to ascertain the rate in cents per 100 pounds, a weight of 6.6 pounds per gallon was used, *251 carried to 3 decimal points. The truck rate on gasoline was used as it was lower than the truck rate on heavy oils, and gasoline constitutes the bulk of the traffic. Appellees were endeavoring to meet the competition of the truck rates on the commodity that was moving in the greatest volume. The rail rates on gasoline are normally on a higher basis than rail rates on the heavier oils, while the reverse is true of truck rates, and in meeting truck competitive rates appellees reduced the rail rate on gasoline and made the reduced rate applicable to both gasoline and heavier oils. Since the average rail loading carload on the heavier oils is 33.8 tons compared with 27.2 tons on gasoline, appellees could not justify a higher rate on the heavier oil.

Since the reduced rates on interstate traffic to Nebraska points had been in effect since December 1, 1955, from Council Bluffs and Sioux City, Iowa, and the Kansas City, Missouri, districts and a terminal at Omaha involving an interstate movement and intrastate rates to Nebraska points from Doniphan, Superior, and the other Omaha terminal had not been reduced, shippers from the latter were being discriminated against and it was necessary that this discrimination be removed by reducing the intrastate rates to the basis already established for interstate movement as set out in tariff 448. The interstate rates from Omaha, Council Bluffs, and other out of Nebraska origin points were approximately 1% cents lower than the intrastate rate from Nebraska shipping points for the same distances.

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Chicago, Burlington & Quincy Railroad v. Herman Bros., 82 N.W.2d 395, 164 Neb. 247, 1957 Neb. LEXIS 138 (Neb. 1957).

82 N.W.2d 395 (Chicago, Burlington & Quincy Railroad v. Herman Bros.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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