Watab Paper Co. v. Northern Pac. Ry. Co.

154 F.2d 436, 1946 U.S. App. LEXIS 3198
CourtCourt of Appeals for the Eighth Circuit
DecidedFebruary 27, 1946
DocketNo. 13133
StatusPublished
Cited by6 cases

This text of 154 F.2d 436 (Watab Paper Co. v. Northern Pac. Ry. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Watab Paper Co. v. Northern Pac. Ry. Co., 154 F.2d 436, 1946 U.S. App. LEXIS 3198 (8th Cir. 1946).

Opinion

GARDNER, Circuit Judge.

This was an action at law brought by appellant as plaintiff to recover $55,000 for alleged excessive freight rates charged and •collected by appellee, Northern Pacific Railway Company, between November 10, 1936, and October 23, 1941, on shipments of pulpwood transported from points in the northern part of the State of Minnesota on the Minnesota and International Railway Company, referred to in the record as the M. & I., the Big Fork and International Falls Railway Company, referred to as the B. F. & I. F., and the Northern Pacific Railway Company, and delivered to appellant at its paper plant at Sartell, Minnesota. The parties will be referred to as they were •designated in the trial court.

Plaintiff is a Delaware corporation, engaged in the manufacture of paper from pulpwood at Sartell, a small town located a short distance north of the City of St. Cloud, in central Minnesota. Defendant is a Wisconsin corporation and is a common carrier owning and operating railway lines in Minnesota and other states. Without attempting geographical accuracy, it is sufficient for the purposes of this opinion to say that defendant’s lines extend north from the Twin Cities, through the town of Sartell, to Brainerd, Minnesota. From Brainerd, Minnesota, the M. & I. line extends northerly to Grand Falls, Minnesota, whence the B. F. & I. F. line extends to International Falls, Minnesota. Defendant •and its connections assessed and collected joint line rates published in tariffs filed with the Minnesota Railroad and Warehouse Commission, and it is the contention of plaintiff that defendant and its named connections were in fact one railroad and that a single line rate was therefore applicable and that plaintiff is entitled to recover by way of damages the difference between single line rates and the rate charged and collected under the joint line tariff.

It was the contention of the defendant in the trial court, and it renews the contention here: (1) That plaintiff failed to establish unity of control and operation between, defendant and the Minnesota and International Railway Company; and (2) that the Minnesota Railroad and Warehouse Commission, after conducting hearings pursuant to Chapter 344 of the Laws of 1913, determined in its administrative capacity that defendant and Minnesota and International were separate railroads and required them by its order to establish joint rates in accordance with certain rules therein set forth; that the named carriers complied with that or.der and subsequent orders and duly filed and published tariffs as required by law and the orders of the Commission and that the rates charged and collected were the only rates applicable and that in the absence of an order by the Commission the court was without power to substitute its judgment for that of the Commission.

Plaintiff’s contention that defendant and the M. & I. were one road for rate-making purposes is bottomed on substantially the following state of facts: Defendant owned 70 per cent of the outstanding capital stock of the M. & I.; five out of seven of the directors of the M. & I. were chosen by defendant; the two corporations had common officers; the traffic, accounting, purchasing, legal and claim departments of the two companies were the same. The M. & I. was heavily indebted to defendant for operating expenses, and defendant held a mortgage on all the property of the M. & I., which mortgage was foreclosed in October, 1941, since which date, however, defendant has operated the M. & I. as a branch line and has applied the single line rates. On the other hand, there was also evidence that the defendant and the M. & I. kept separate books; that they had separate maintenance forces, station employees and operating crews; that the M. & I. made its own purchases, made its own reports to other carriers for interline traffic, and collected balances owing to it, paid defendant for joint use of the station at Brainerd; for heavy repairs, and for rolling stock under the per diem rules of the Association of American Railroads; that separate contracts were entered into with the United States Railroad Administration during the period of Federal control, and with the Railroad Brotherhoods; that separate reports were made to the Interstate Commerce Commission and the Minnesota Railroad and Warehouse Commission and the federal and state taxing authorities; that the M. & I. owned its own locomotives, pulpwood cars and box cars; that it charged defendant for the carrying of its materials and private cars; that passes on [438]*438one road were not honored- by the other, and that at all times the minority interests in the M. & I. evinced a strong and active interest in its affairs as evidenced, among other things, by the case of Backus-Brooks Co. v. Northern Pac. Ry. Co., 8 Cir., 21 F.2d 4, brought by minority stockholders of that company.

The trial court sustained defendant’s second contention and in doing so expressed the view that as the Commission had, pursuant to law, after hearing approved the joint rate reflected by defendant’s tariffs, the court could not in this collateral proceeding review or re-determine the decision of the Commission in effect holding that defendant and the M. & I. were separate railroads entitled to file a joint line tariff and to collect the charges shown by such filed tariffs. The court considered the evidence produced going to the question as to whether or not the defendant had such control or ownership over its connecting lines as to make the lines for rate-making purposes a single line, for the purpose of determining whether or not there was before the Commission evidence sufficient to invoke the Commission’s jurisdiction to hear and determine this question. Manifestly, if the Commission had such jurisdiction, it had jurisdiction to reach either a correct or an incorrect decision, but whether correct or incorrect its determination could not be attacked collaterally as in this proceeding attempted. The power to regulate and establish' freight rates is a legislative power which the Minnesota Commission alone may exercise. It had jurisdiction of the subject matter and of the parties. St. Paul Book & S. Co. v. St. Paul Gaslight Co., 130 Minn. 71, 153 N.W. 262, Ann.Cas.1916B, 286, L.R.A. 1918A, 384; Minnesota Rate Cases, (Simpson v. Shepard) 230 U.S. 352, 33 S.Ct. 729, 57 L.Ed. 1511, 48 L.R.A.,N.S., 1151, Ann.Cas.l916A, 18; Backus-Brooks Co. v. Northern Pac. Ry. Co., supra; Great Northern Ry. Co. v. Merchants Elev. Co., 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943; Woodrich v. Northern Pac. Ry. Co., 8 Cir., 71 F.2d 732, 97 A.L.R. 401.

It stands without dispute, and the court found, that the defendant and its connecting carriers had filed and published tariffs containing schedules of rates applicable to the shipments involved. Having done so, defendant was required to charge and collect the rate so designated in the tariff and no other, and the shipper, the plaintiff, was bound by the published schedules of rates if in fact they were filed and adopted with the approval of the Commission. The published tariffs could not be avoided nor varied by contract or otherwise, and the rates in effect at the time of the shipment even though unjust or unreasonable must prevail unless and until changed in the manner provided by law.

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154 F.2d 436, 1946 U.S. App. LEXIS 3198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watab-paper-co-v-northern-pac-ry-co-ca8-1946.