Laurel Cotton Mills v. Gulf & Ship Island Railroad

84 Miss. 339
CourtMississippi Supreme Court
DecidedMarch 15, 1904
StatusPublished
Cited by3 cases

This text of 84 Miss. 339 (Laurel Cotton Mills v. Gulf & Ship Island Railroad) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laurel Cotton Mills v. Gulf & Ship Island Railroad, 84 Miss. 339 (Mich. 1904).

Opinion

Truly, J.,

delivered the opinion of the court.

On the 7th day of February, 1900, the Laurel Cotton Mills, a domestic corporation, intending to construct and operate a cotton mill at the city of Laurel, on the line of the Grulf & Ship Island Railroad Company, entered into a contract with said railroad company by which it agreed and obligated itself to locate and build its said cotton mill and warehouses on certain grounds previously staked out and agreed upon, accessible from said railway, and to furnish the right of way for all [359]*359necessary switches from both directions to connect the track of said railroad company with the cotton-mill grounds and buildings. In consideration of the performance of this covenant, the Gulf & Ship Island Railroad Company agreed on its part, by said contract, “to maintain in effect rates on manufactured goods produced by the said Laurel Cotton Mills, not exceeding, to competitive points, the rates effective from Stonewall and Meridian, Mississippi, on the dates,” and “to maintain in effect a milling-in-transit arrangement for the cotton to be manufactured at the said Laurel Cotton Mills — that is to say, any freight charges that may be paid on cotton shipped from stations between Hattiesburg and Jackson, or on the Laurel Branch, shall be allowed and credited, pound for pound, as part payment of freight charges on the manufactured goods or products when shipped to market over the line of the said Gulf & Ship Island Railroad Company. This arrangement to continue for a period of ten years.” This contract was duly signed by both the contracting parties. After its execution the Laurel Cotton Mills proceeded with the construction of its factory, and on April 1, 1901, began business; its said mill having been fully completed, and being then in full operation. From this date until the 1st of March, 1902, the Gulf & Ship Island Railroad Company observed on its part the stipulation of the contract in reference to the “milling-in-transit arrangement,” as therein agreed upon. After that time it refused further to credit the freight charges paid on raw cotton on the shipment of manufactured goods made over its line by the appellant, as provided by the terms of the contract. At the date of the contract, and at all times subsequent thereto, there were established and in operation at Stonewall and Meridian, in this state, cotton mills manufacturing the same class of goods and being engaged in exactly the same line of business as the appellant. The Gulf & Ship Island Railroad Company ignored that provision of the contract by which it had obligated itself to grant to appellant rates on manufactured goods “not ex-[360]*360eeeding, to competitive points, the rates effective from Stonewall and Meridian” on the date of shipment, but imposed on the shipments made by appellant greater rates to competitive points than the mills located at the two places mentioned were required to pay on shipments made by them to the same points. This condition of affairs continued until January, 1903, when the appellant filed its declaration setting out the above facts. It filed therewith a bill of particulars showing the amount of freight paid on raw cotton, and which it was entitled to have had credited on the freight charges on its shipment of manufactured goods under the milling-in-transit arrangement set out in the contract, and also a bill of particulars showing the amount of freight which it had been required to pay on shipments made to competitive points over and above the freight rates in force at the date of such shipments from Stonewall and Meridian to the same points. The bill of particulars showed that of the shipments under the milling-in-transit arrangement, many were interstate shipments from Laurel, in this state, to sundry points beyond this state. To this declaration the appellee filed demurrers, three in number, but presenting substantially but two points — viz., that the contract is void because (1) contrary to the law regulating interstate commerce; (2) contrary to the provisions of Code 1892, governing the supervision of common carriers. These demurrers were by the circuit court sustained, and from that judgment the Laurel Cotton Mills prosecutes this appeal.

The proposition upon which appellee relies may be broadly stated as follows: The contract sued on is void on its face, because it has the necessary effect of creating a discrimination forbidden both by the federal interstate commérce act and our own state statute dealing with the same subject-matter, and for the further reason that this milling-in-transit arrangement which is set out in the contract is the granting of a rebate, the allowance of which is unlawful, under § § 4292, 4293, Code [361]*3611892, and sec. 6 of the interstate commerce act (Act Feb. 4, 1887, ch. 104, 24 Stat., 380 [U. S. Comp. St. 1901, p. 3156]).

“Before we consider the phraseology of the statute, it may be well to advert to the causes which induced the enactment. They chiefly grew out of the use of railroads as the principal modern instrumentality of commerce. While shippers of commerce are under no legal necessity to use railroads, practically they are. The demand for speedy and prompt movement virtually forbids the employment of slow and old-fashioned methods of transportation, at least in the case of the more valuable articles of trafile. At the same time the immense outlay of money required to build and maintain railroads, and the necessity of resorting, in the securing of the rights of way, to the power of eminent domain, in effect disable individual merchants and shippers from themselves providing such means of carriage. From the very nature of the case, therefore, railroads are monopolies, and the evils that usually accompany monopolies soon began to show themselves, and were the cause of loud complaints. The companies owning tbe railroads were charged, and sometimes truthfully, with making unjust discriminations between shippers and localities, with making secret agreements with some to tbe detriment of other patrons, and with making pools or combinations with each other, leading to oppression of entire communities.” We quote this language from the decision of the supreme court of the United States in Texas & Pacific R. R. Co. v. Interstate Commerce Commission, 162 U. S., 211 (16 Sup. Ct., 666; 40 L. ed., 940), as being as applicable to our own as to tbe federal legislation for the regulation of commerce and tbe supervision of carriers.

In dealing with the subject of the supervision of railroads and common carriers generally, the object of the legislation was to benefit and regulate commerce by preventing railroad corporations and all other common carriers from unduly favoring one shipper or class of shippers, or one special place, to the injury of other persons and places similarly situate. The [362]*362first material inquiry, then, is whether or no the .contract under review, in express terms or by necessary implication, presents a case of discrimination, within the meaning and intent of secs. 2 and 3 of the interstate commerce act (U. S. Comp. St., 1901, p. 3155), and §§ 4287, 4290, Code 1892. The object which both statutes referred to had in view was practically the same, and as stated — i. e., to prevent unjust discrimination being made in transportation against any person, locality, or corporation. It must be noted that this discrimination must be unjust between shippers, persons, localities, or corporations, by granting undue preference to one or subjecting another to unreasonable disadvantage.

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Bluebook (online)
84 Miss. 339, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laurel-cotton-mills-v-gulf-ship-island-railroad-miss-1904.