St. Louis Southwestern Railway Co. v. State , 85 Ark. 311 ( 1907 )

Hiel, C. J.

Phillip Reinsch, a dealer in baled hay at Stuttgart, made demand on appellant railroad company for cars during the season running from October 30, 1905, to January 20, 1906, and was furnished some cars; but the railroad company failed to furnish him within those dates fifty-one cars, which were properly demanded for various shipments to be made to different points within the State of Arkansas.

Reinsch filed complaint before the Railroad Commission and on a hearing the Commission found that the company had violated sections 10 and 18 of the act of March 11, 1899, which are sections 6803 and 6813 of Kirby’s Digest; and a rule of the Commission, effective August 5, 1907, known as Order 305; and directed the prosecuting attorney to bring suit pursuant to section 6813, Kirby’s Digest.

This suit resulted; and, the finding of the Commission making a prima facie case against the company under section 6814, Kirby’s Digest, the company assumed the burden of excusing itself for failing to furnish the cars in question; the failure was acknowledged.

The first question urged is that the Commission did not have authority to make said Order 305. Aside from its effect in this case, the question is academic, because in section 3 of the act of May 28, 1907, and section 22 of the act of April 19, 1907, express authority may be found for rules on the subject. Nor is the order important in this case. There was no failure to furnish cars within the five days therein fixed, but a failure to furnish at all the cars in question. Section 6803, Kirby’s Digest (expressly named in the suit as one violated), requires the carrier to receive, load, unload, transfer, store and deliver all property offered for shipment, at charges not greater than those named in posted schedules. This would undoubtedly include the duty of furnishing cars on proper demand. Section 6804 also requires the furnishing of cars; and section 6808 renders a violation of these requirements a cause of action for damages by the injured shipper. Section 6813 renders the violation of any of these requirements (and also legal orders of the Commission) cause for incurring the penalty herein sued for. These statutes are merely declaratory of common-law rights (St. Louis S. W. Ry. Co. v. Clay County Gin Co., 77 Ark. 357), for which these statutory remedies are provided.

The counsel attack as unreasonable and void Order 305, for the. reasons stated by the Supreme Court of the United States in Houston & Texas Cent. Rd. Co. v. Mayes, 201 U. S. 321, wherein a statute of Texas, somewhat similar to this order, was under review. As the order is unnecessary to the maintenance of this suit, as the suit is also predicated upon statutes which cover évery question in it, a discussion of it would be out of place.

The only other question requiring consideration is whether the undisputed evidence introduced by appellant presented a sufficient excuse for the failure to furnish the cars. The question has given the court much concern, and the cause has been resubmitted for argument upon it; and, after the benefit of additional arguments and briefs, the court has reached its conclusion slowly.

The evidence of appellant (and its' evidence was all there was upon this subject) showed that during the time of the failure to furnish the cars in question the railroad company had sufficient equipment to meet the demands of its traffic; that there was on its line no unusual or extraordinary or unprecedented rush of business; but with its own car equipment on its line there was no time when any industry would have suffered from want of cars. In fact, the appellant was shown to have a larger car equipment than the average freight-carrying road; and the failure to furnish cars'was wholly due to an inability to regain its cars which were sent to other roads carrying freight from its own line. Over 90 per cent, of the railroads of the United States belong to the American Railway Association, which promulgates rules for a system of interchange of cars among its members. The appellant is one of its members and governed by its rules. The appellant is an originating line, originating about 70 per cent, of its traffic and receiving about 30 per cent. To illustrate its situation: during the month of November, 1905, it had in revenue service 9517 cars, of which it averaged daily' 3982 in use on its own lines, 5525 off its line and 2519 foreign cars in use. In other words, a daily balance of exchange of 1473 cars was against it, and its shortage in cars was only about 650 per day. Unless there was an efficient car service exchange and return, it is apparent that an originating road would soon be depleted of its equipment, especially in times of great traffic in the East, as there was within the time in question. In ordinary circumstances, the proper average time for the return of a car is 22 days; during the time in question it was three months or more. The rules of the American Railway Association provided a-charge of 25 cents a day for 30 days;-after 30 days, and after ten days’ notice to the road holding it, then $1 per day was charged. This 25 cents charge was not for revenue, but was fixed as a basis of settlement; the charge after 30 days of $1 a day for each car was a penalty to hurry its return.

The heavy business .in the last two or three years before the time in question caused serious drains on appellant and other originating lines. About two years before this time a per diem of 20 cents per day per car was put in, and it was increased to 25 cents; and after the time in question in this suit, and owing to the serious effect on originating lines during the season in question, it was increased to 50 cents per day. The system has proved ineffective to return cars for the past two or three years. In times of dull traffic, appellant’s cars would be sent back to its lines to stop this charge, and in the short season of moving the crops over the country, when the demand was great everywhere and traffic congested in the East, then the foreign roads preferred paying the per diem to returning the cars. It was cheaper to non-originating roads to pay this small charge than to own more equipment.

The general superintendent of appellant says: “In a congested state of traffic, the per diem charged would not have any effect in getting the cars returned, for other roads would much rather pay twenty-five cents and keep the cars than to return them.” This same official says that it was customary, in order to avoid the penalty, to shift the cars within thirty days to another line where it can remain for another thirty days without other penalty than the twenty-five cents per diem. It is one of the rules of interchange of cars that a foreign car must be loaded and moved only in the direction of home; and, had this rule been observed, appellant would not have had a shortage, but it was habitually disregarded ever since the traffic in the last few years grew heavy.'

The evidence indisputably establishes that it is a benefit to the shipping public to interchange cars, and not to refuse to send cars off the line. Broadly stated, this evidence presents this issue; Railroad companies who interchange cars with appellant here failed in their duty to appellant in keeping, instead of returning, its cars, and appellant correspondingly failed in its duty to its shippers, including the complainant in this action. Shall the shipper or the carrier suffer for this default?

It is unquestionably good for the public that the railroads of the United States have a system of interchange of cars, instead of each road hauling to its termini only, and thereby force reloading and reshipment. The inconvenience and expense of such a system would at once condemn it as failing to meet public requirements. It is unquestionably the policy of both State and Federal legislation to facilitate, if not require, an interchange of cars. The most recent illustration of this policy is found in section 17 of the act of April 19, 1907 (Acts 1907, p. 463.) For one railroad company to be an Ishmaelite among its associates would operate disastrously to its shippers. The shippers of Arkansas expect the public carriers to put their cotton to the spinners in New England, and their fruit to the North, and their lumber and coal to^ the four quarters of the Union without change from consignor to consignee.

The beneficent and useful purpose of car service associations formed to facilitate the interchange and movement of cars is well stated in New Orleans & N. E. Rd. Co. v. George, 82 Miss. 710; and the same court, in a thoughtful and well considered decision, held that a car service association was not a combination in restraint of trade and obnoxious to the antitrust statutes. Yazoo & M. V. Ry. Co. v. Searles, 68 L. R. A. 715. The Kentucky court says what the carriers may lawfully do for themselves they may do through a common agent, and the reasonable rules of a car service association are enforceable. Ky. Wagon Mfg. Co. v. Ohio & M. Ry. Co., 32 S. W. 596. The result of these and other decisions, as summed up in an excellent text book, is that these associations are lawful, and their rules and regulations, when reasonable, will be upheld. 2 Hutchinson on Carriers (3 Ed.), § 861. Mr. Elliott says that such associations, formed for the purpose of making and enforcing reasonable regulations to facilitate business and secure the prompt loading, unloading and return of cars, can not be held illegal upon the ground that the constituent companies by becoming members surrender their corporate functions and control to the association. 4 Elliott on Railroads, § 1568.

The right of carriers to engage in such associations and to enforce reasonable rules is well stated by the Virginia court in Norfolk & W. Ry. v. Adams, 22 L. R. A. 530; but in sustaining the reasonableness of the rule in that case the court said: “The railroad company as a common carrier is bound to fur-' nish cars for transportation of freight; and they must have control over their cars in order to perform their duties to the public.”

The Kentucky Court, in Newport News M. V. R. Co. v. Reed, 10 Ky. L. Rep. 1020, referred to in note to 43 L. R. A. 227, said: “To allow that it (the carrier) may be excused for failure to furnish cars by showing that it allowed its cars to be taken to other roads beyond the power to control them would be to allow that it might fail to supply itself with sufficient facilities to transact its business on its own line. * * * Means not under the control of the carrier are just as hurtful as means not provided.”

The evidence here shows that the appellant company lost control over a majority of its cars, knowing that the rules for their return were insufficient to insure their return. Experience for the past two or three years had demonstrated that the rules for return of cars were insufficient. At the time the cars were needed to move the crops, they were in the East earning less than interest and wear; and when they could be spared by appellant and probably bring in a small revenue from demurrage charges elsewhere, they were returned home. The system of interchange of cars which appellant suffered to prevail, as controlling its car service, had broken down completely; its rules were habitually disregarded, and the return of cars within a reasonable time not produced; and yet it is offered as the excuse for a failure to comply with its duties to the public. This system caused the railroad company to lose control of its equipment, and a continuance of its inefficient service is an abdication of its corporate functions to a voluntary association irresponsible for losses to its patrons and probably irresponsive to the just demands of the appellant company itself.« It may be better for the appellant to suffer these ills than to sail under a black flag and refuse to send its cars beyond its line; that is not a question for the court. Until the appellant carrier shows reasonable rules and regulations for the interchange of cars, it can not avail itself of these rules of interchange as causing and excusing its default to the public, for the rules here shown have proved unreasonable and inefficient before this default occurred.

Judgment affirmed.