Cleveland, C., C. & St. L. Ry. Co. v. Hirsch

204 F. 849, 123 C.C.A. 145, 1913 U.S. App. LEXIS 1355
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 6, 1913
DocketNo. 2,291
StatusPublished
Cited by31 cases

This text of 204 F. 849 (Cleveland, C., C. & St. L. Ry. Co. v. Hirsch) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cleveland, C., C. & St. L. Ry. Co. v. Hirsch, 204 F. 849, 123 C.C.A. 145, 1913 U.S. App. LEXIS 1355 (6th Cir. 1913).

Opinion

WARRINGTON, Circuit Judge

(after stating the facts as above). [1] The first ground of the demurrer challenged the court’s jurisdiction, but nothing was stated in the argument nor is anything found in the briefs on this subject. The company was incorporated under the laws of Ohio and Indiana, and is a citizen of each of the states, having its principal office and place of business in Cincinnati; and Hirsch is a citizen and resident of Hamilton county, Ohio, doing business there in the name of I. C. Hirsch Iron & Steel Rail Company. The only perceivable ground of jurisdiction is that the cause arises under a law of the United States. The bill shows that a substantial portion of the service intended, and in fact performed, under the contract in dispute, is of an interstate character; and although the amended bill does not in all respects strictly comply with the rule touching jurisdictional averment, yet we think enough is definitely stated, without resorting to argumentative inference (Shulthis v. McDougal, 225 U. S. 561, 569, 32 Sup. Ct. 704, 56 L. Ed. 1205), to show that the controversy arises in material part under the Interstate Commerce Act. Since a correct decision of the case must depend on the construction of portions of that law, jurisdiction of the court below sufficiently appears. The familiar rule laid down by Chief Justice Marshall (Cohens v. Virginia, 6 Wheat, at *379, 5 L. Ed. 257) furnishes the answer to this feature of the demurrer:

“A ease In law or equity consists of the right of the one party, as well as of the other, and may truly he said to arise raider the Constitution or a law of the United States, whenever its correct decision depends on the construction of either.”

So in Tennessee v. Davis, 100 U. S. 257, 264 (25 L. Ed. 648), the court said:

“Cases arising under the laws of the United States are such as grow out of the legislation of Congress, whether they constitute the right or privilege, or claim or protection, or defense of the party, in whole or in part, by whom they are asserted.”

See In re Lennon, 166 U. S. 548, 553, 17 Sup. Ct. 658, 41 L. Ed. 1110; Macon Grocery Company v. Atlantic Coast Line, 215 U. S. 501, 506, 30 Sup. Ct. 184, 54 L. Ed. 300; Second Employer’s Liability Cases. 223 U. S. 1, 56, 32 Sup. Ct. 169, 56 L. Ed. 327, 38 L. R. A. (N. S.) 44; Toledo, A. A. & N. M. Ry. Co. v. Pennsylvania Co. (C. C.) 54 Fed. 730, 732, 19 L. R. A. 387; Kalispell Lumber Co. v. Great Northern Ry. Co. (C. C.) 157 Fed. 847, 848; Lovell v. Newman & Son, 227 U. S. 420, 421, 33 Sup. Ct. 375, 57 L. Ed.-.

[2] The only remaining ground of the demurrer is that complainant has not made such a case as entitles it to any relief in a court of equity. The first question naturally arising under this ground is whether the contract is valid or void. Analysis of the averments of the amended bill, as epitomized in the statement, plainly shows un[852]*852der the demurrer that the railroad company agreed to turn over property to Hirsch for a period of S years, from September 1, 1904 (with the privilege of an additional term of 20 years), at a yearly rent of more than $2,000 less than its true rental value, in consideration of the rent reserved and of the privilege of carrying Hirsch’s in and out bound freight at competitive rates. This excess rental value was much more in each of the years of 1906 to and including 1909 than the total annual revenue which the company, derived -in those years from traffic, both intrastate and interstate, shipped and received by Hirsch. It results that during those years the company not only furnished Hirsch with free transportation of his in and out bound freight, but also paid him additional sums in the form of rental value for the privilege of doing so. True, the traffic of Hirsch might in other years yield revenue greater than the excess rental value, but such contribution of the company would be none the less in amount or certain in its effect.

It is urged that this at last means nothing more than a “cheap lease,” and that railroad companies are entitled to give inducements to 'business concerns to locate along the lines of the conrpanies and so to increase the traffic. But the amended bill is still more specific. It is averred, in respect of this excess rental, that “thereby it was agreed” that the company should allow and Hirsch should receive such excess, not alone in consideration of Hirsch’s shipments, but “as a concession upon the freight charges to be paid by him,” and that this was “well known to * * * Hirsch-and intended by him to be the effect of said agreement.” Whether it was intended by these averments to charge that the comparty was less guilty than Hirsch as respects any violation of law in entering into the contract, and so augment the right to maintain the suit, is not made definite, and cannot be considered on the demurrer. Presumably the company knew the rental value of its property at the date of the contract, and the circumstances under which it was entered into, as well as at the time it made the averments; yet this is of no practical importance in determining the validity of the contract, since intent is imputed where the effect of the instrument is to violate the law. Whatever may be said of the contract on its face, it must be tested in connection with such facts as are well pleaded; and the averments concerning the excess in rental value are positive statements of fact.

So far as' its validity is concerned-, the contract cannot be effectively distinguished from that of the Pfaelzers, which was recently condemned in United States v. Union Stockyards, 226 U. S. 306, 308, 33 Sup. Ct. 83, 57 L. Ed. -. That contract provided that if the Pfaelzers would construct a packing plant adjacent to the stockyards, and maintain and operate the plant for a period of 15 years, and either buy and use in their slaughtering business only such live stock as moved through the stockyards, or pay the same sharges thereon as if the stock had passed into the stockyards and had been purchased there, they: should receive $50,000 from the ' Stockyard Company, which under its • charter and certain facts disclosed was held ■ to be also a' common carrier subject to the Interstate Commerce Uaw. Mr. Juátifce Day"said (226 U. S. 308, 33 Sup. Ct. 89, 57 L. Ed. —);

[853]*853“In other words, this plant in effect may pay for the services of the Stockyard Company up to the sum of .?50,000, with the bonus given to the Pfaelzers for the location of their plant in juxtaposition to the stockyards. * * * Any other company with which it has made no contract would be compelled to pay the full charge for the services rendered, without any rebate or concession. Another company might have a contract for a larger or smaller bonus, and thereby receive different treatment. Certainly as to the company which receives no such bonus there has been an undue advantage given to and an unlawful discrimination practiced in favor of I'faelzer & Sons.

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Bluebook (online)
204 F. 849, 123 C.C.A. 145, 1913 U.S. App. LEXIS 1355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleveland-c-c-st-l-ry-co-v-hirsch-ca6-1913.