Duluth-Superior Milling Co. v. Northern Pacific Railway Co.

Maeshaxl, J.

Was the service in question of interstate character ? If so, if is conceded that the Wisconsin railroad commission had no jurisdiction to regulate the charges therefor and the judgment based thereon must be reversed.

Respondent’s claim is, that because the bill of lading, in each case, was for a transit to Superior, and the terminal yard of the Minneapolis, St. Paul & Sault Ste. Marie Railway Company was there, and as near the finally determined upon unloading point as could be reached by its line, and there was no through bill of lading to such point, that the switching service was rendered as an independent matter. That, at first impression, seemed plausible.

True, when a car reached tbe terminal yard it bad arrived at Superior. If we look only to tbe literal meaning of words and close our eyes to tbe service tbe shipper contemplated, to tbe knowledge of tbe carrier, we could readily conclude that tbe interstate service was completed before tbe switching service was rendered and therefore such service was intrastate. But tbe obligation of tbe initial carrier must be viewed from tbe standpoint of tbe parties when it was incurred, and tbe real relation thereof to the service required to execute tbe shipper’s purpose must be kept in view. The obvious facts that, at the place of origin of tbe freight, both parties to the transaction of commencing the transit contemplated a termination where tbe grain could be discharged in the usual manner ; that there 'were no facilities therefor- -at the terminal yards and that the universal'custom was to move cars, after having been placed in the yard, to some mill or elevator at the head of the lake designated, in due course, by the shipper through his agent, either on the initial carrier’s or some other road connecting therewith, show that the bill of lading given in each case, does not, in its letter, express tbe whole agreement. The word “Superior” was not used to mean, merely, inside the corporate limits thereof or the initial carrier’s yard there. The ordinary rule applies that where, following the literal sense of a contract, the result would be so unreasonable or absurd that no one would be fairly considered to have so intended, and if, without so bending tbe words used out of their ordinary sense as to violate the rules of language or of law, they can be seen to embody a sensible agreement, and the circumstances characterizing the transaction support that view, such should be taken as the real understanding between the parties. That course does not change a contract, — -vary it in any way; it merely gets out of it the sense the parties intended to put into it.

Without spending timé to discuss the matter at length, it is considered, very plain, that though “Superior” was stated as the destination in case of each car, the real meaning was the subsequently selected place for unloading at Superior; the terminal yard being regarded as a temporary stopping place on the route to such place and the point covered by the tariff rate to Superior, in case of completion of the transit to such place being necessarily over a connecting line. It was no more the contemplated termination of the interstate commerce service when the car was required to be delivered to a connecting line in order to reach the unloading point, than when it could be transported to such point on the line of the initial carrier. The contract, in any event, was made in view of the necessity which might arise for use of a connecting line. It provided for delivery to such a line, in the route to the final destination. No other term than “Superior” exactly fitted the situation, at the origin of the service, because the particular destination was determinable only by the shipper’s agent later. As soon as that was known, in due course in each case, the car was moved thereto by the initial carrier, or a connecting road employed by it at the expense of the shipper, according to the necessities of the case, and thereby the service contemplated at the start brought to a finish.

Every circumstance in respect to the matter under consideration bears out the view expressed. Not only must it have been contemplated that the interstate commerce character of th'e grain loaded upon the cars of the initial carrier would continue to the unloading point, but the freight was handled under orders of the shipper’s agent to the end, possession however remaining with the initial carrier or its selected connecting line, — the final service being rendered upon its request and receipt of information as to the destination.

So it seems clear that the service contemplated when the freight was received gave thereto its impre'ss as a subject of interstate commerce; that such impress was not removed until the service was completed by the last movement which ended at the unloading point. The intention of a shipper, known to tbe carrier .when tbe transit commences, as to tbe service required to complete tbe former’s purpose, and perhaps whether so known or not, — not tbe mere tariff rate mentioned in tbe first bill of lading, or tbe mere destination mentioned in connection with such tariff rate, or whether there is a through bill of lading ór a bill of lading at all covering every element of tbe transit, — governs tbe character of tbe commerce. Tbe named destination in tbe initial bill may be a mere place in tbe route to the final destination to be reached by tbe entire service, part to be performed by tbe initial carrier and part by connecting carriers; tbe charges for services of the latter to follow tbe initial bill as an expense matter in accomplishing tbe entire service or be liquidated in some other manner.

It is difficult to see bow any other course of reasoning or any other result, under tbe circumstances, could well be reached than tbe foregoing, even if tbe question at issue were to be viewed from an original standpoint. If a car of freight, originating at St. Paul, Minnesota, were to be started for New York destined for some point abroad, tbe land transit being by an initial and successive carriers, all for a through rate, but subject to a custom at New York for trunk lines to turn incoming freight over to a concern doing switching service for delivery at tbe particular steamship dock designated by tbe shipper after commencement of tbe transit; tbe charge therefor to follow tbe bill as a special expense matter, — no one would question but that the entire service would be of interstate character. Why so? Not because of a through-rate contract for service, obviously, which might be rendered by a service charge over the initial line to its terminus, with authority to turn the car over to a connecting line for transportation to the terminus thereof, with authority continuing to deliver for further traxisportation and, finally, for delivery to a switching company in New York for placement at the unloading point, the charge for each section of the transit after tbe first to be evidenced by a bill of lading issued by each particular line, following tbe initial bill, and all including tbe switching expense to be discharged in tbe bands of tbe last carrier or in some other way. There might be several contracts all making up one entire service or be one, to effect tbe object of transporting tbe car to tbe dock in New York, and tbe particular dock not be determined upon until after tbe arrival in tbe last terminal yard of tbe final trunk line. It cannot be that tbe mere method of accomplishing tbe object in view when freight is delivered to an initial carrier,— whether by a through-routing contract, tbe transit to be by way of an initial and successive lines, including a terminal switching company service, or by successive connecting contracts, each in order from tbe first being authorized to make tbe one succeeding, — determines tbe character of tbe commerce as to whether inter- or intrastate as regards tbe last movement required to reach tbe unloading point. Tbe character of tbe initial contract is, doubtless, evidentiary of tbe purpose of a shipper; but it does not control to make a subject of interstate intrastate commerce. Tbe purpose, in starting tbe freight, if pursued to tbe end, not tbe particular method of executing it, controls. In other words, tbe service sought at tbe start, all of it, tbe initial and tbe successive elements connected to form tbe whole, settles tbe matter.

Counsel for respondent relies, largely, on what is found in Gulf, C. & S. F. R. Co. v. Texas, 204 U. S. 403, 27 Sup. Ct. 360. Tbe railroad commission and trial court, doubtless, were likewise influenced, as it seems, without fully appreciating tbe reasoning of tbe court in connection with tbe facts with which it bad to deal. There was not tbe circumstance of a transit, commenced, as in this case, with intention of having tbe service continue to an unloading point requiring tbe particular element called in question. After a movement from a point in one state to a point in another, contemplated at tbe start, an attempt was made to tack on to tbe completed interstate service an independent transportation to another distant point in the same state. There was no obligation of the carrier entered into at the time of the origin of the freight, for delivery to a connecting carrier for transportation to an unloading point, as in this case. The delivery which was finally made was to a second carrier — made as a mere forwarder to snch carrier, to perform a new contract and not in furtherance of a transit initiated -at the start. Here the last delivery to a carrier was made under the initial contract 'and as part of the service contemplated at the start for transportation of the grain from the place of origin of the freight to the place for discharging it.

As we understand the logic of the Gulf Case, if the service, commenced by the initial carrier, had contemplated continuance, by means of a connecting line, to the end of the transit which was called in question, neither changes of title to the subject of transportation in the meantime, or separate bills of lading for the separate sections of the transit mahing up the continuous service, nor absence of a bill of lading for any particular section, would have made any difference with the question of whether the whole was or was not interstate commerce. There was a finding made by the trial court that the service initiated was the transportation of the freight from Hudson, South Dakota, to Texarkana, Texas, and that after the service had been fully completed the freight was started under an entirely new contract in execution of a new purpose from Texarkana, Texas, to Goldthwaite, Texas. The court, on the appeal, treated that finding as conclusive and, naturally, reasoned therefrom that the last shipper who had bought the property during the interstate movement, might have unloaded it at Texarkana and shipped other property of the same kind on to Goldthwaite to fill the order from there; that a continuous service in fact, commencing at Hudson, South Dakota, and ending at Goldthwaite was not contemplated when the transit commenced; that the primary idea was of transportation to Texarkana for unloading there and identification of the property with chattels in general within the state of Texas. It is to be particularly noted that, in the Goldthwaite case, the service initiated was for a movement of property from Hudson, South Dakota, to a particular consignee at Texarkana; that the initial carrier issued its bill of lading, stipulating for a carrier’s rate to Kansas City, the property to be there turned over to a connecting carrier; that the latter issued its independent bill of lading for delivery to a new consignee at Texarkana, and that it was the attempt of the latter consignee to tack on his entirely new desired transportation, having no connection whatever with the initiated service, which led to the trouble. That the facts do not fall within the principle applicable to the quite different circumstances we have in this case, seems plain.

Counsel and the trial court seem to have been misled by the idea that the syllabus in the Goldthwaite case — to the effect that an interstate shipment on reaching the point specified in the original contract of transportation, ceases to be an interstate shipment as regards a further movement in the same state — embodies the legal principle illustrated hy the opinion and decision. Not so. The opinion shows, quite clearly, that the case did not turn on the mere fact that the shipment had reached the point specified in the original bill of lading before the movement called in question was entered upon; but because the service initiated, as matter of fact,1 was from Hudson, South Dakota, to Texarkana, Texas, and, necessarily, to some delivery point therein where the freight, in due course, could be discharged. True, the language of the opinion has led on many occasions to attempts to apply it, as in this case, but without success, the court in each instance being required to point out that the nature of the service, not the contract mentioned in any particular bill of lading, is the controlling circumstance.

The foregoing, analysis of Gulf, C. & S. F. R. Co. v. Texas, to tbe effect that it is tbe service contemplated at tbe commencement of a transit wbicb impresses tbe subject of tbe commerce with interstate character, not tbe particular contract expressed in tbe initial bill of lading, is made very plain in subsequent cases decided by tbe federal supreme court, as the following will show:

In Southern Pac. T. Co. v. Interstate Comm. Comm. 219 U. S. 498, 31 Sup. Ct. 239, it was held that goods destined for export and, necessarily, when started in transit to be delivered at tbe dock at a seaport for further transportation, are tbe subject of interstate commerce all tbe way from tbe initial point to tbe unloading dock, whether shipped on through bills of lading or on one bill to a terminal within tbe states to be then delivered to a carrier for tbe foreign destination. In tbe particular case, .there was an initial bill of lading, as here, wbicb called for a shipment to the point of connection with tbe terminal tracks. Various railroads delivered cars, either directly or by switching service rendered by other roads, to tbe tracks of tbe terminal company, to be distributed by it, subject to its charges for trackage, to unloading points on tbe docks. Tbe terminal company tracks furnished a connecting link between tbe terminals of tbe various systems of railroads and tbe unloading points on tbe docks. No bills of lading were issued for tbe transit over these tracks, or for switching service thereto from tbe roads wbicb did not directly connect therewith. Tbe bills of lading, in general, from points without tbe state of Texas as to property destined to pass over the terminal tracks in order to reach the dock, showed tbe places of origin of tbe freight and tbe destination to be Galveston. Tbe initial lines, tbe switching company lines, and tbe terminal tracks were all held to be links in tbe transaction of interstate commerce business as to products intended for transit, which in tbe whole was of interstate character, and that when the property was delivered to tbe initial carrier it was said to have been delivered for tbe entire purpose though the bill of lading did not in terms cover it. “It makes no difference/’ said the court, “that the shipments of the products were not made on through bills of lading.” They were all destined for export and by the delivery to the Galveston, Harrisburg & San Antonio Railway they must be considered as having been delivered to a carrier for transportation to the foreign destination, the terminal company being a part of the railway for the purpose. Thus the real substance of the transaction, not the initial bill of lading, or whether it, in terms, called for a delivery over the terminal track or not, settled the question. The purpose of the transit could not be executed without the use of the connecting tracks. The same is true in this case. The purpose of the shipment of the 490 cars of grain from points without this state could not be executed without the switching movement from the terminal point of the Minneapolis, St. Paul & Sault Ste. Marie Railway Company over the tracks of the appellant to some unloading point, — an elevator for storage and loading on boats for further transportation, or a mill for change of the grain into manufactured products, or for further transportation without the state.

In the Southern Pacific Terminal Gase it was held that the change at the docks of raw material into manufactured products for further transit was an incident of interstate commerce and did not mark the termination of the transit so long as the real purpose was to export the material forming ■the subject of the commerce at the start.

The doctrine of the foregoing, that it is the service contemplated and intention of the shipper, not the scope of the initial or that and successive bills of lading, or whether there is a bill of lading at all, that gives the subject of the transportation the impress of interstate commerce, and that the particular circumstances are evidentiary only and of more or ■less, or not any weight as regards the vital fact, is found indicated in many previous and subsequent cases, the more important of them being cited to onr attention. Railroad Commission v. Worthington, 225 U. S. 101, 32 Sup. Ct. 653; Coe v. Erroll, 116 U. S. 517, 6 Sup. Ct. 475; Union S. Y. Co. v. U. S. 169 Fed. 404, 94 C. C. A. 626; U. S. v. Union S. Y. & T. Co. 226 U. S. 286, 33 Sup. Ct. 83; McNeill v. Southern R. Co. 202 U. S. 543, 26 Sup. Ct. 722; West Texas F. Co. v. Tex. & Pac. R. Co. 15 Interstate C. C. Rep. 443. To these many more might be added. They seem to leave little or no room for doubt but that the service sought at the place of origin of the freight in question when it was tendered and accepted, was a transit to an unloading point at the head of the lakes, and, regardless of contracts for specific portions of the transit, it did not lose its impress as a subject of interstate commerce till delivered into possession of respondent at its mill. Once out of possession of the shipper and in possession of the carrier as a subject of interstate commerce, always interstate commerce until delivered into possession of a purchaser as intended at the start. As said, in effect, in West Texas F. Co. v. Tex. & Pac. R. Co.: it was an interstate commerce shipment from the time it commenced as such, until it was delivered at the respondent’s mill.

In the case last referred to the facts were quite identical with those here and the interstate commerce commission, following the logic of the federal decisions, easily distinguished it from Gulf, C. & S. F. R. Co. v. Texas, 204 U. S. 403, 27 Sup. Ct. 360, upon which the complainant there relied, as the complainant here does. The freight was delivered to the Santa Fe road at Gallup, New Mexico, consigned to the West Texas Fuel Co. at El Paso. The Santa Fe tariff was for a transit to its terminus at El Paso. It employed the Texas & Pacific Railway Company, which had a connecting line reaching the desired point for unloading, to switch the car thereto. The latter company, without direction from the party to finally receive the freight at the termination of the switching service, but as a servant of the Santa Fe Company, executed final delivery service, making its charge therefor, which was liquidated, as in. this case. The property did not pass into possession of the shipper or his vendee until after the switching service was performed.

In Union S. Y. Co. v. U. S. 169 Fed. 404, 94 C. C. A. 626, the original bill of lading was substantially the same as here, and the switching service the same. The purpose of the transit from the outside state place was to reach an unloading point at the stock yards, making use of the connecting stock-yards track necessary. The service over such tracks was performed at the request of the primary carrier and with-, out any bill of lading. The court remarked, in effect, controlling decisions leave no room to doubt that the stock yards company, in the operations of its tracks, is a common carrier engaged in interstate commerce.

In Railroad Commission v. Worthington, 225 U. S. 101, 32 Sup. Ct. 653, Gulf, C. & S. F. R. Co. v. Texas, supra, was specially relied upon, as here, to maintain that through billing to the unloading point is essential to preserve the interstate commerce character of the freight to such point when reached by a switching service; but that was most emphatically rejected,—Southern Pac. T. Co. v. Interstate Comm. Comm. 219 U. S. 498, 31 Sup. Ct. 239, being particularly referred to as establishing the rule that service intended and possession therefor by successive carriers to the unloading point, control as to the character of the last stage of the service as well as the first; that all the elements going to make up the entirety have the same cast.

In U. S. v. Union S. Y. & T. Co. 226 U. S. 286, 33 Sup. Ct. 83, we find the last expression of the federal supreme court, — reiterating what had been often said theretofore, that in such circumstances as we find here, the switching service is but one element in an interstate transit from loading, to unloading point; the subject being in possession of an initial and successive carriers from the place of origin of the freight to tbe discharge into the possession of the receiver at the end of the transit. There, as here, the bill of lading issued by the initial carrier did not cover the transit over the switching track and there was no bill therefor. The service was performed by the switching company for the trunk line company and they paid therefor, absorbing it. The court, in speaking generally of the character of the service rendered by the trunk line and terminal company, said, quoting from a previous ease, the interstate commerce duty “begins with their delivery to the carrier to be loaded upon its cars, and ends only after the stock is unloaded and delivered or offered to be delivered to the consignee.” The fact that the performance of the service is distributed among different corporations, makes no difference where the service to be performed is a part of the carrying of freight by railroad. Nor does it make any difference that the switching company does not issue any bill of lading. “It is the character of the service rendered, not the manner in which the goods are billed, which determines the interstate character of the service.”

There seems to be no need of pursuing the discussion further. The underlying principle indicated by the judicial treatment of the vital question here, plainly condemns the holding that, as the 490 cars of grain were placed on the terminal tracks of the initial carrier, merely waiting direction as to where to place them by the switching service for unloading, they lost the impress of.interstate shipments. That impress was removed when the cars were placed at respondent’s mill and under its control for unloading and not until then. The trial court decided wrong, as did the state railroad commission on the ultimate question of fact, by misconceiving the principle of law applicable to the evidentiary circumstances. In such a situation the ordinary weight to be given a trial court’s decision on an issue of fact does not apply. The difficulty was in following the supposed rule of Gulf, C. & S. F. R. Co. v. Texas, supra, that a through-billing feature or a contract for carrying to a particular point, regardless of the purpose of the shipment or the necessity of a further transit to reach an unloading point, is the test of when an interstate shipment ends. The language of that case, as is evident by the many times it has been referred to without success, must be confined to the particular situation the court had to deal with.

By the Court. — The judgment appealed from is reversed, and the cause is remanded with directions to dismiss with costs.