Louisville & Nashville Railroad v. Ohio Valley Tie Co.

170 S.W. 633, 161 Ky. 212, 1914 Ky. LEXIS 51, 161 Ky. 222
CourtCourt of Appeals of Kentucky
DecidedNovember 24, 1914
StatusPublished
Cited by5 cases

This text of 170 S.W. 633 (Louisville & Nashville Railroad v. Ohio Valley Tie Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louisville & Nashville Railroad v. Ohio Valley Tie Co., 170 S.W. 633, 161 Ky. 212, 1914 Ky. LEXIS 51, 161 Ky. 222 (Ky. Ct. App. 1914).

Opinion

Opinion of the Court by

Judge Nunn

— -Affirming.

This is an action by the Ohio Valley Tie Company to recover of the Louisville & Nashville Railroad Company $100,000 in damages for wilful and malicious injury to business, inflicted by withholding numerous conveniences and accommodations furnished other shippers, and by imposing extortionate freight rates and other annoying burdens not imposed upon other shippers. It charges all of this was done for the wilful and deliberate purpose, [214]*214not only of injuring appellee’s business, but of destroying it and thereby eliminating it as a competitor of the railroad company along its line for the purchase of crossdies. The jury returned a verdict against the railroad company for $56,971.56. From the judgment on this verdict this appeal is taken. The jury’s verdict was itemized, that is, had special findings, and $50,000 was awarded for damage to plaintiff’s business and credit; $5,000 injury to ties; $1,000 attorney fees; $771.56 expense of transferring ties; and $200 for loss of time and services performed.

Appellant contends there is no warrant in law for the recovery of any damages, and that, in any event, the verdict is flagrantly and grossly excessive.

The tie company was incorporated in 1903, with a capital of $50,000, but it did not locate its business on the lines of appellant until 1908. In the first year of its existence it handled about. 250,000 ties; its business grew every year, and in the fiscal year ending September 1st, 1911, it handled 1,300,000 ties at a profit of $27,000, but in the fiscal year ending September 1st, 1912, its business was reduced1 to 1,000,000 ties, and a loss sustained of $28,000. Theretofore, it had never lost money, that is, its profits, beginning with $10,000 the first year, had gradually increased until the time of this loss in 1912. In order to understand the controversy, it should be explained that railroads maintain what are called class and commodity rates. A special rate is made to carry cheap and bulky commodities, which move in large quantities, like lumber, grain and raw ores. Higher rates' are charged on other commodities in proportion to their value, cost of carriage, and liability to injury. Commodities of this kind are graded into 1, 2, 3, 4, and 5 classes, the highest charge being made for class No. 1, which includes the more valuable commodities, while the cheapest class rate is named on class No. 5, which includes such commodities as chums, chair stock, pails, pumps, farm wagons, wheel barrows, and a hundred others of that kind. The commodity rate on lumber is and was only about one-fourth of the 5th class rate.

In 1888, in the case of Reynolds v. Western N. Y. and Penn. Railway, 1 I. C. C., 593, it was held that interstate rates on cross-ties ought not to exceed the rates on lumber. We take these remarks from the ruling in that case:

“It requires no argument to prove that the placing of railroad ties in the same category with these articles [215]*215(5th class) is neither reasonable .nor just. The mere fact that it is so found is sufficient of itself to suggest that it was placed there for some purpose not readily apparent and different from the reasons which ordinarily influence classification * #
“The ordinary conflict of interest between the railway and the shipper is here intensified by the fact that the direct interest of the carrier requires the cheapening of the shipper’s product. It was candidly admitted by its general superintendent that this consideration influenced the conduct of defendant in fixing its rates upon ties at a time when its interstate rates were not subject to control under a law of Congress. But if this was legal then, it is no longer. It involved and implies extortion. It is not only repugnant to every man’s sense of propriety and justice, but it is directly forbidden and made illegal by the third section of the act to regulate commerce, in that it subjects this particular description of traffic to undue and unreasonable prejudice and disadvantage for the pecuniary benefit of the carrier itself. It is a course of dealing if possible even more obnoxious to the just provisions of the act than would be a tariff arranged in the same manner for the purpose of giving a preference to another shipper competing •from another direction in the same market.
“Bates established by a common carrier under the influence of a desire to keep upon its line material for which the road itself has use, or to keep the price thereof low for its own advantage, cannot be justified either in morals or in law. Every party who produces such material is entitled to sell it when he wishes in the best available market, and the common carrier has no right to prevent his doing so by disproportionate or unreasonable rates. This the defendants in the present case have been attempting to do.”

In case No. 3136, Chicago Car Lumber Co. v. Louisville & Nashville, the Interstate Commerce Commission awarded reparation to the Chicago company for overcharges in rates the railroad had collected for carrying cross-ties as of the 5th class instead of upon the lumber or commodity rate. In that case the commission said:

“The commission has repeatedly held that the rate on ties should not exceed the rate on lumber from which they are made.”

This complaint of the Chicago Lumber Company, above referred to, was of the same nature as the Bey[216]*216nolds complaint, supra, and in each case awarded reparation to the claimant for the difference between the overcharges collected on cross-ties at the published fifth-class rate and what the charges would have been if based upon the commodity rate accorded to lumber, and made an order requiring the railroad company to establish and maintain, between the points which the shipments involved, a rate on cross-ties not in excess of the lumber rate. The Kentucky Railroad Commission in 1905 in case of Norman Lumber Co. vs. L. & N. R. R. Co. ruled to the same effect. Both the state and interstate commissions not only required establishment of lumber rates on cross-ties between the points named in the complaints, but severely condemned the old system of classification, and held that there was no justification for charging any more than the lumber rate on cross-ties between any points. If there was room for argument that these complaints, and the rulings of the commission thereon, were not sufficient to inform the appellant of the general policy of the commissions with reference to such classification, and the manifest iniquity of the fifth-class rate for cross-ties, the question is certainly settled beyond controversy by the Supreme Court in the case of Mitchell Coal Company v. Penn. R. R. Co., 230 U. S., 134, where it was decided that when once the Interstate Commerce Commission has condemned a rate or a practice, any other shipper may rely, upon that ruling, and may bring suit without first going before the Commission. In this connection, it may be again noted that the practice of putting ties on any but the lumber rate was condemned as far back as 1888.

Until the summer of 1910, the appellant only collected for carrying cross-ties the amount of the lumber rate, although it is conceded that in its published tariff rates cross-ties were classified and listed in the fifth-class, so that nominally the rate on cross-ties was from 25 to 40 cents per cwt., while in practice it collected but 8 or 10 cents but cwt., the lumber rate.

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Cite This Page — Counsel Stack

Bluebook (online)
170 S.W. 633, 161 Ky. 212, 1914 Ky. LEXIS 51, 161 Ky. 222, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisville-nashville-railroad-v-ohio-valley-tie-co-kyctapp-1914.