Midway Co-Operative Elevator Co. v. Great Northern Railway Co.

169 N.W. 494, 41 N.D. 1, 1918 N.D. LEXIS 121

• Court: North Dakota Supreme Court
• Decided: May 21, 1918
• Status: Published

Opinions

Christianson, J.

This action was brought to recover moneys expended by the plaintiff in coopering and lining certain freight cars which the defendant furnished to the plaintiff in which to ship grain over defendant’s railroad.

In its complaint plaintiff alleges “that at the several times between September 15, 1915, and December 31, 1915, and at several times during the months of January, March, April, and Hay, 1916, as appears from the annexed schedule, the plaintiff was a shipper of numerous carloads of grain consisting of wheat, rye, flax, and barley over the railway of said company from Wolseih, North Dakota, to St, Paul, Minnesotathat for each shipment or carload the freight car furnished by the defendant was not properly lined or coopered for receiving or containing the kind of grain sought to be shipped, and that defendant failed and neglected when requested to repair the same and put it in readiness for shipment within four hours after due notice of the defect had been given to the defendant’s agent; that the plaintiff was obliged to line and cooper the cars, and pay out and expend on the several cars the sum shown in the schedule annexed to the complaint amounting in the aggregate to the sum of $151.41.

The defendant in its answer denies the allegations of the complaint and affirmatively alleges that the claims referred to in the complaint arose incident to interstate commerce shipments and in the course of interstate commerce; that the defendant was an interstate carrier, and that at the time of the shipment referred to in the complaint it had filed with the Interstate Commerce Commission the tariffs under which such shipments were made, and that said tariffs did not provide for payment or allowances for repairs of cars or cooperage of the character described in the complaint or otherwise; that said rates had been duly approved by the Interstate Commerce Commission and published and promulgated as required by law, and were then in full force and effect; that the state statute relating to cooperage has no application to interstate shipments and that the court has no jurisdiction over the subject-matter, but that the same is one for the Interstate Commerce Commission.

At the close of the testimony the defendant’s counsel made a motion for a directed verdict on substantially the same grounds, set out in the affirmative defense. The motion was granted. Judgment wa3 entered dismissing the action and plaintiff appeals.

Plaintiff predicates its right to recover upon § 4707, Comp.'Laws 1013, which provides: “Every railroad corporation or common carrier doing business in this state shall when requested by any shipper of wheat, flax, or other grain, flour or flour mill products, furnish to such shipper a box car or box cars properly lined or coopered for receiving and containing the kind of grain, flour or flour mill products sought to be shipped and if such railroad, railroad corporation or common carrier shall furnish any car not so lined or coopered to such shipper and shall fail to prepare and put in readiness such car within four hours after notice by such shipper to its agent at point of shipment that such car is not in proper condition such shipper may repair such car at his own expense and recover such sum so expended in a civil action against such railroad corporation or common carrier.”

Plaintiff also contends that this section is merely declaratory of the common law, and merely aids a shipper in enforcing a common-law obligation against a carrier.

The Federal Constitution expressly grants power to Congress to regulate commerce among the several states and to make all laws necessary and proper for carrying that power into execution.

“The authority of Congress extends to every part of interstate commerce and to every instrumentality or agency by which it is carried on; and the full control by Congress over the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations.” Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18.

The object of vesting such power in Congress was to insure equality and freedom in commercial intercourse, and uniformity of regulation, against conflicting and discriminatory state legislation. 7 Enc. U. S. Sup. Ct. Rep. 303. There can be no divided authority over interstate commerce. The regulations of Congress on that subject are supreme. And when Congress sees proper to act with respect to any particular branch of interstate commerce, state regulations in conflict therewith or acting on the same subject, are thereby superseded. Chicago, R. I. & P. R. Co. v. Hardwick Farmers Elevator Co. 226 U. S. 426, 57 L. ed. 284, 46 L.R.A.(N.S.) 203, 33 Sup. Ct. Rep, 174; 5 R. C. L. p. 704.

The Interstate Commerce Act provides that it shall be unlawful for any common carrier subject to the provisions of the act, to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation or locality, or any particular description of traffic in any respect whatsoever, or to subject any particular person, company, firm, corporation or locality, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. Miehie, Carr. § 4016.

The Interstate Commerce Commission has been vested with plenary administrative power to enforce the provisions of the act. Under the powers conferred the Interstate Commerce Commission may supervise the conduct of carriers, hear complaints concerning the violations of the act, investigate the same, and if the complaints are well founded it may direct not only the making of reparation to the injured person, but may order the carrier to desist from such violation in the future. Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Robinson v. Baltimore & O. R. Co. 222 U. S. 506, 56 L. ed. 288, 32 Sup Ct. Rep. 114.

The Interstate Commerce Commission has exclusive jurisdiction “to determine whether a regulation or a practice affecting rates or matters sought to be regulated by the Interstate Commerce Act is unjust or unreasonable, unjustly discriminatory, preferential, or prejudicial.” Michie, Carr. § 4156. And the courts have no power to originally hear complaints upon any of the matters sought to be regulated by the act and within the jurisdiction of the Interstate Commerce Commission. Texas & P. R. Co. v. Abilene Cotton Oil. Co. supra. “The effect of the act is not merely to suspend the right of a shipper to maintain an action at law to recover damages resulting from an unreasonable rate or discriminating regulation or practice established by an interstate carrier while such rate or regulation remains in force, but to supersede such right entirely, and substitute therefor the remedy provided by the act itself.” Miehie, Can*. §.4156.

“The dominating pui'pose of the statute,” said Mr. Justice Hughes, speaking for the court in the Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 419, 57 L. ed. 1511, 1550, 48 L.R.A.(N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18, “was to secure conformity to the prescribed standards through the examination and application of the complex facts of transportation by the body created for that purpose, and, as this court has repeatedly held, it would be destructive of the system of regulation defined by the statute if the court, without the preliminary action of the Commission, were to undertake to pass upon the administrative questions which the statute has primarily confided to it.”

The effect of the act to regulate commerce upon the various problems arising with respect to the interstate traffic has been considered and expounded by the Supreme Court of the United States in many cases. In Chicago, R. I. & P. R. Co. v. Hardwick Farmers Elevator Co. 226 U. S. 426, 57 L. ed. 284, 46 L.R.A.(N.S.) 203, 33 Sup. Ct. Rep. 174, that court held that the Minnesota Reciprocal Demurrage Law was invalid and ineffective as applied to cars used in interstate traffic. In discussing the Interstate Commerce Act and its effect on the Minnesota statute, the court said: — “As legislation concerning the delivery of cars for the carriage of interstate traffic was clearly a matter of interstate commerce regulation, even if such subject was embraced within that class of powers concerning which the state had a right to exert its authority in the absence of legislation by Congress, it must follow in consequence of the action of Congress to which we have referred that the power of the state over the subject-matter ceased to exist from the moment that Congress exerted its paramount and all embracing authority over the subject. We say this because the elementary and long-settled doctrine is that there can be no divided authority over interstate commerce, and that the regulations of Congress on that subject are supreme.” .

In Illinois C. R. Co. v. De Fuentes, 236 U. S. 157, 59 L. ed. 517, P.U.R.1915A, 840, 35 Sup. Ct. Rep. 275, the court held that “Congress has so far undertaken to regulate the subject as to invalidate, as an unlawful regulation of interstate commerce, an order of a state railroad commission under which a carrier may be required, upon demand of a carrier or shipper, and on terms fixed by the commission, to switch empty cars from any connection with a competing interstate railway to a designated side track within its own terminals in a city, for the purpose of being loaded there with goods intended for interstate commerce, and when so loaded, to move the same back to the competitor’s line for continued transportation to another state, and also to accept from competing interstate lines at points within the city loaded cars brought from other states, and place them on its own side track although such side track was the real destination contemplated at the time of the original shipment.”

Tn Texas & P. R. Co. v. American Tie & Lumber Co. 234 U. S. 138, 58 L. ed. 1255, 34 Sup. Ct. Rep. 885, the court ruled that a suit may not- be maintained against a railway company to recover damages resulting from its refusal to accept an interstate shipment of oak railway cross ties in the absence of previous action by the Interstate Commerce Commission, even though the refusal to accept the shipment was based upon the want of any filed or published rate applicable to such shipment.

That questions of the nature presented in and which form the basis of plaintiff’s cause of action in this case are among those regulated by the Interstate Commerce Act has repeatedly been recognized by the Interstate Commerce Commission and also by the Supreme Court of the United States. See National Wholesale Lumber Dealers Asso. v. Atlanta Coast Line R. Co. 14 Inters. Com. Rep. 154; New York State Shippers’ Protective Asso. v. New York C. & H. R. R. Co. 30 Inters. Com. Rep. 437; National Counsel, F. C. A. v. Chicago, B. & Q. R. Co. 34 Inters. Com. Rep. 60; Loomis v. Lehigh Valley R. Co. 240 U. S. 43, 60 L. ed. 517, 36 Sup. Ct. Rep. 228.

In National Counsel, F. C. A. v. Chicago, B. & Q. R. Co. 34 Inters. Com. Rep. 60, the Interstate Commerce Commission considered the complaint of shippers of grain owning elevators at country stations in the states of Illinois, Iowa, Minnesota, Nebraska, Kansas, North and South Dakota, alleging that the railroad companies were not furnishing cars in suitable conditions for the transportation of grain in bulk, and asking that they (the shippers) be allowed either to furnish cars suitable in all respects for carrying this traffic, 'or make allowances to them for work done and materials furnished to prepare the cars for loading. The Interstate Commerce Commission gave careful consideration to the various aspects of the questions presented and clearly recognized that these questions were within the jurisdiction of and properly determinable by the Interstate Commerce Commission.

In the opinion in that case the Interstate Commerce Commission said:

“Originally cars designed for shipment of grain were equipped with stationary or swinging grain doors, which, however, were not found to be practicable. Because of inability to secure a satisfactory permanent grain door the practice of defendants for more than a quarter of a century has been to furnish grain shippers at country stations with ‘sectional doors/ or boards, which may be nailed to the car door posts. . . . There is. no uniformity with respect to the amount or the character of the material furnished by different carriers. Some of them furnish sectional doors, boards, lath and burlap or paper specially designed for the purpose; others furnish sectional doors, lumber and paper; and others furnish nothing but sectional doors and lumber. . . . Practically all cars furnished to these country elevators must be cleaned by the shipper. A large percentage of them require more or less patching, or coopering, to render them fit to carry grain without leakage. It is impossible to determine from the record the exact percentage of cars furnished which the shippers must materially repair before loading. So far as the evidence shows, some patching and repairing work by the shipper, besides placing the grain doors and coopering around them, is required on about 50 per cent of the ears furnished. This work may consist of covering one or more holes or cracks in the floor, or it may, and often does, include repairs to door posts, ends, linings, roof, and sides of ear. . . . During the year 1908 and continuing until July, 1911, defendants’ rules provided that when cars furnished for grain, grain products, or other bulk freight required repairing to insure against leakage in transit, and the material necessary for the repairing was furnished by the shipper, payment for the actual cost of the same, including cost of necessary labor, but not exceeding 80 cents per car, would be made by the carrier furnishing the car. It developed that it was impossible for the carrier to keep any check of the material used or alleged to have been used, or of the labor so performed. Knoiun abuses of the ride existed, and discriminations inevitably resulted.

“For a number of years an allowance of $2 per car for grain doors furnished was paid to terminal elevator companies. This was found to result in the carriers paying for grain doors that had been made out of material furnished by the caraiers. Claims were presented for furnishing grain doors for outbound cars when the doors or the materials used therefor were taken from inbound cars. This allowance and the allowance of 80 cents per car to the country elevators were discontinued at the same time. . . . The repair work done upon cars by shippers, such as closing a bole with boards or coopering the car with burlap or paper, is not permanent. The work must ordinarily be done at the station from which the shipment is made. In the very nature of things the shipper who loads the ear can prepare it for loading to better advantage than can anyone else. It is therefore not unreasonable to expect the shipper to sweep a car or do a reasonable amount of cleaning, or to make some minor and inexpensive repairs to prepare the car for loading and prevent leakage of grain in transit. It is impracticable for the carriers to have competent workmen at all stations to do this work, and minor cleaning, patching and coopering can readily be done by men in the employ of the elevator companies, who know exactly what is to be done and how best to do it. If the car furnished requires much repairing, if its door posts are shattered or broken, or if it has many holes or cracks through which grain would sift in transit, the shipper should refuse to accept it. The obligation of the carrier is to promptly furnish a suitable car. The shipper is not bound to receive and load a car upon which he must expend labor and materials to make it suitable to transport grain.Experience has demonstrated that it is impossible to accurately check claims for material furnished and labor performed by shippers. We conclude that we may not with propriety fix by order a maximum amount that should be paid the shipper by a carrier for labor performed and for materials furnished by him in installing grain doors or doing other incidental repair work on cars furnished for shipments of grain in bulk. If, however, a, earner makes any allowance to shippers at country stations for worlc done or materials furnished, the com ditions and purposes as tvell as the maximum allowance must he stated in its tariff and must he applied without discrimination. The amount and character of the material furnished shippers for grain doors and for incidental coopering and repairing should be uniform and adequate for the purpose; just what will he furnished should he clearly stated in tariffs. It is manifest that if a carrier furnishes nothing but loose boards at one point and at another point furnishes sectional doors, lath, paper, or burlap, unlawful discrimination results.”

The case of Loomis v. Lehigh Valley R. Co. 240 U. S. 43, 60 L. ed. 517, 36 Sup. Ct. Rep. 228, originated in the courts of the state of Now York. In that ease the shipper sought to recover on the theory that the carrier had failed to perform its common-law duty to furnish adequate cars; that the shippers had been compelled to obtain the necessary material and perform the labor required to make the cars adequate for transporting agricultural products in bulk, and that consequently the shippers were entitled to recover as damages their outlay for the material furnished and labor performed. The case involved both intrastate and interstate shipments. The New York court of appeals held that the shippers had a right to recover upon the common-law liability of the carriers, unless the local or Federal statute had established different rules. It concluded that the New York statutes created no bar to recovery and that the shippers were entitled to recover on account of the intrastate shipments. But it further concluded that Congress had assumed such control over interstate shipments as to deprive the state courts of power to consider claims arising out of them. 208 N. Y. 312, 101 N. E. 907. A writ of error was sued out and the cause brought before the United States Supreme Court for review. That court affirmed the decision of the New York court of appeals.

The opinion of the United States Supreme Court is summarized in the syllabus as follows: “The character of equipment which the carrier must provide and allowances which it must make for instru-mentalities supplied, and services rendered, by the shipper — such as inside doors and bulkheads in cars and timber therefor — are problems which directly concern rate making and are peculiarly administrative on which there should be an appropriate inquiry by the Interstate Commerce Commission before being submitted to a court.” 240 U. S. 43.

“Without preliminary action by the Interstate Commerce Commission a state court has no jurisdiction of an action by shippers to recover from an interstate carrier sums expended by them in constructing grain doors or bulkheads in cars furnished by the carrier for interstate carload shipments of farm products in bulk, the applicable duly filed interstate rate schedules making no reference to allowances for grain doors or bulkheads.” See Loomis v. Lehigh Valley R. Co. supra.

The opinions of the Interstate Commerce Commission and of the Supreme Court of tbe United States in tbe two cases last cited speak for themselves. Tbe questions involved in tbe instant case are similar to those which were involved in tbe cases cited. And in our opinion the doctrine announced by tbe United States Supreme Court in tbe case last cited is controlling in tbe instant case.

Plaintiff contends that tbe cars on which tbe repairs were made were not instrumentalities of interstate commerce at the time the duty to repair them arose. It contends that this duty arose when they were ordered; that tbe ears first became instrumentalities of interstate commerce after they bad been loaded with grain, billed for shipment to a point in some other state, and actually started on the way to their destination, and that until they were so loaded, billed, and started, they were subject entirely to state control and state regulations. Plaintiff’s contention is distinctly contrary to the principle announced, and fully answered by what the United States Supreme Court said, in the several cases cited above. See Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Robinson v. Baltimore & O. R. Co. 222 U. S. 506, 56 L. ed. 288, 32 Sup. Ct. Rep. 114, and Loomis v. Lehigh Valley R. Co. supra.

It appears on the face of the complaint, and the evidence shows, that the transactions upon which plaintiff seeks to recover arose during interstate traffic, and are regulated by the Interstate Commerce Act. And under the decisions of the United States Supreme Court the state courts may not entertain plaintiff’s action without preliminary action by the Interstate Commerce Commission. The judgment appealed from must be affirmed. It is so ordered.

Gea.ce, J. I concur in the result.